Multiple Choice
When a firm has a loss, the total revenue is _____ than the total cost.
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10. The Costs of Production
Revenue, Cost, and Profit
Multiple Choice
If a firm produces 5 units and sells each for \$39.00, and its total cost of producing 5 units is \$160.00, what is the firm's profit or loss?
A
Profit of \$35.00
B
Loss of \$35.00
C
Profit of \$195.00
D
Loss of \$160.00
Verified step by step guidance1
Calculate the total revenue (TR) by multiplying the quantity of units sold by the price per unit. Use the formula: \(TR = Q \times P\), where \(Q\) is quantity and \(P\) is price per unit.
Calculate the total cost (TC) of producing the units, which is given as \(160.00\) in this problem.
Determine the profit or loss by subtracting total cost from total revenue using the formula: \(\text{Profit or Loss} = TR - TC\).
Interpret the result: if the value is positive, the firm makes a profit; if negative, the firm incurs a loss.
Express the final answer clearly as either a profit or a loss with the corresponding dollar amount.
