Question

To calculate profit, producers subtract their total production cost from their

Answer 1

To calculate profit, producers subtract total costs from total income.

This is a basic premise of cost theory. Total revenue is obtained by multiplying the price by the quantity sold. The total cost is the multiplication of the cost of each unit by the quantity.

Profit is the decrease in revenue by cost.

Answer 2

To calculate profit, producers subtract their total production cost from their total revenue. It is the total income of a business and is calculated by multiplying a quantity goods sold by the price of the goods. Total revenue in finance refers to the total receipts from sales of a given capacity of goods or services.