Profit per unit is equal to
A)Price divided by average total cost.
B)Price minus average total cost.
C)Total revenue minus total cost.
D)Total revenue minus variable cost divided by quantity.

Question

Quizplus · Accepted Answer

Profit per unit is the difference between the price and the average total cost. Therefore, option B is the correct answer. Option A is incorrect because it only calculates the profit margin, not the profit per unit. Option C is incorrect because it calculates the total profit, not the profit per unit. Option D is also incorrect because it calculates the contribution margin, not the profit per unit.

Profit Per Unit Is Equal to