The Reliable Auto Repair Shop is earning a total revenue of $7,000. Its total fixed costs are $700, and its total variable costs are $2,500. The Reliable Auto Repair Shopʹs profit is
A) -$1,800.
B) $3,800.
C) $4,500.
D) $6,300.

Question

Quizplus · Accepted Answer

Profit is calculated as total revenue minus total costs (fixed costs + variable costs). Here, profit = $7,000 - ($700 + $2,500) = $7,000 - $3,200 = $3,800.

The Reliable Auto Repair Shop Is Earning a Total Revenue