Suppose you were working for Richstone's bakery and calculating whether the bakery was making a profit, considering the recent increase in rent. You have data for price (P),MR, ATC, MC, AVC, at the quantity of 1,000 breads a day. Among the other relationships you consider is (P - ATC) which measures the firm's
A) total profit
B) profit per unit of output
C) marginal profit
D) total revenue
E) average variable cost

Question

Quizplus · Accepted Answer

Profit per unit of output is calculated as the difference between the price per unit (P) and the average total cost per unit (ATC). This difference (P - ATC) gives the profit earned on each unit sold.

Suppose You Were Working for Richstone's Bakery and Calculating Whether