Which of the following could be used to calculate the profit

Which of the following could be used to calculate the profit for a firm? (Points : 1) Profit = MR - MC Profit = (P - MC)Q Profit = MR - TC Profit = (P - AC)Q

Solution

Answer:

Profit of a firm is determined by the difference between total revenue and total cost of the production. Total revenue is nothing but the price times quantity that means if 1 unit of product has price p then total revenue is q*p. This means total revenue determines the total sales revenue.

Again total cost is the unit cost that means average cost times quantity. If 1 unit of product costs AC then, total cost is AC*q .

So the profit is = p*q - AC*q

= (p-AC)*q