Profit is defined as:
A) net revenue minus depreciation.
B) average revenue minus average total cost.
C) marginal revenue minus marginal cost.
D) total revenue minus total cost.

Question

Quizplus · Accepted Answer

Profit is calculated as total revenue minus total cost. This includes all the expenses incurred in producing and selling the goods or services, not just the variable costs. Depreciation is a non-cash expense that is not included in calculating profit. Average revenue minus average total cost is the formula for calculating average profit, not total profit. Marginal revenue minus marginal cost is the formula for calculating marginal profit, not total profit.

Profit Is Defined As