How does a firm calculate its profit? total revenue minus marginal revenue variable cost plus total cost total revenue minus total cost marginal revenue minus marginal cost

The correct option is 3. A firm calculate its profit as " Total profit = Total revenue - Total cost".

Explanation:

Profit of a firm is financial gain. It is the difference between the total amount earned by the firm and the total amount spent in buying, operating, or producing something.

It other words, profit is the difference between total revenue and total cost.

A firm calculate its profit as

Total profit = Total revenue - Total cost

Where, total revenue is the sum of fixed and marginal revenue, total cost is the sum of fixed cost and marginal cost.

A firm calculate its profit as " Total profit = Total revenue - Total cost". Therefore the correct option is 3.

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