Question

What is the difference between profit and revenue?

Answer 1

Answer:

The revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production cost.

Step-by-step explanation:

To answer the question, let us picture that you have a business, and you sell bread.

If you sell bread for $5 per loaf, and you sell 2 loaves, your revenue will be 2 * 5 = $10.

Let's say that in order to bake the bread, you have to rent your neighbor's oven for $0.25 per hour, the flour costs $1 per loaf, and the yeast costs $1 (these are all made-up numbers). If each loaf takes one hour to bake, two loaves will cost 0.5 + 2 + 2 = $4.50 to make. Your profit will then be your revenue minus your cost, or 10 - 4.5 = $5.50.

From this scenario, we can see that the revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production cost.

Hope this helps!

Answer 2

Answer:

Revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs.

Step-by-step explanation:

Profit, or net gain, is the amount of money made after subtracting production costs.

Revenue is the total amount of money earned, or gross weight, before anything is subtracted for production costs.