A typical firm's profit is found by the following formula:
A) P x L - W x Y
B) P x W - L x Y
C) P x MPL - W
D) P x Y - W x L

Name: A typical firm's profit is found by the following formula: A) P x L - W x Y B) P x W - L x Y C) P x MPL - W D) P x Y - W x L
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Question

Quizplus · Accepted Answer

Profit is calculated as total revenue minus total cost. Total revenue is price (P) times quantity (Y), and total cost is wage (W) times labor (L).

A Typical Firm's Profit Is Found by the Following Formula