Question on: JAMB Economics - 1995
Given that TC = TFC + TVC and TR = AR x Q, profit is equal to
A
(AR + Q) - TFC
B
\(\frac{\text{(TFC + TVC)}}{Q}\)
C
(AR x Q) - TC
D
\(\frac{\text{(TC x Q)}}{AR}\)
Ask EduPadi AI for a detailed answer
Correct Option: C
Profit is calculated as Total Revenue (TR) minus Total Cost (TC).
1. **Total Revenue (TR):** TR is given by AR (Average Revenue) multiplied by Q (Quantity), i.e., TR = AR x Q.
2. **Total Cost (TC):** TC is the sum of Total Fixed Costs (TFC) and Total Variable Costs (TVC), i.e., TC = TFC + TVC.
3. **Profit Calculation:** Profit = TR - TC. Substituting the formulas, Profit = (AR x Q) - TC.
Add your answer
Please share this, thanks!
No responses