Profit can be shown graphically by depicting a firm's costs and revenues, and is determined mathematically by calculating the:

Question

Quizplus · Accepted Answer

Profit is calculated by subtracting total costs from total revenues. The area of the box that is (price minus average cost) times the quantity represents the firm's total profit. This is because price minus average cost represents the firm's profit margin per unit, and multiplying this by the quantity sold gives the total profit. Therefore, option C is the correct answer.

Profit Can Be Shown Graphically by Depicting a Firm's Costs