The amount of revenue that exceeds the total costs of production is called a firm's ________.
A) total revenue
B) profits
C) marginal revenue
D) marginal costs
E) variable revenue

Question

Quizplus · Accepted Answer

Profits represent the surplus amount of revenue that a firm earns after deducting its total costs. It is the excess amount of money that a firm attains from its operations. Therefore, option B is the correct answer. Option A is incorrect because total revenue is the entire amount earned by a firm through sales, irrespective of the costs incurred. Option C is incorrect because marginal revenue is the extra revenue earned by a firm by selling an additional unit of output. Option D is incorrect because marginal cost reflects the additional cost of producing each additional unit of output. Option E is incorrect because variable revenue is not a commonly used term in economics.

The Amount of Revenue That Exceeds the Total Costs of Production