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Module 8 Assignment

The document defines several key business terms: 1. Profit is the financial gain made by a business after subtracting all expenses from total revenue over a period of time. 2. Profit per unit is the profit made from each individual item sold. 3. Total profit is the accumulation of all profits earned by a business in a period after deducting all costs and expenses from total revenue. 4. The MR=MC rule states that businesses should produce at the output level where marginal revenue equals marginal cost to maximize profits. 5. The TR-TC rule says that economic profit is maximized when total revenue exceeds total costs.

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Rosario Cabarrubias
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79 views

Module 8 Assignment

The document defines several key business terms: 1. Profit is the financial gain made by a business after subtracting all expenses from total revenue over a period of time. 2. Profit per unit is the profit made from each individual item sold. 3. Total profit is the accumulation of all profits earned by a business in a period after deducting all costs and expenses from total revenue. 4. The MR=MC rule states that businesses should produce at the output level where marginal revenue equals marginal cost to maximize profits. 5. The TR-TC rule says that economic profit is maximized when total revenue exceeds total costs.

Uploaded by

Rosario Cabarrubias
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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JMJ MARIST BROTHERS

NOTRE DAME OF MARBEL UNIVERSITY


COLLEGE OF BUSINESS AND ADMINISTRATION
City of Koronadal 9506
South Cotabato, Philippines
Name: Cabarrubias, Rosario Course & Year: BSMA-2
Date: November 30, 2020

Module 8- Assignment: Describe the following terms:

1. Profit

According to Kenton from Investopedia, profit is a financial gain, advantage or

benefit of a business and also is the excess over the returns to the capital, labor, land,

expenses such as salary and rent expense and also other expenditure incurred during

the business cycle. The term profit is commonly used in the business world it defines as

the excess of the total revenue over the total cost during a specific period of time or a

specific day of sale. 

The amount of a profit in the business can be derived by solving the total amount

earned by the business and deducting the production cost is the difference between the

two in a positive amount there is profit but if it is negative it is not a profit that it is

considered as a loss of economic profits. this is because of the difference between the

revenue received from the sale of an output or the product and the cause of all the

inputs used such as the raw materials as well as other opportunity and overhead

expenses and costs.

2. Profit per Unit

Profit per unit is simply the amount of profit The business could make in making a

sale per unit of sale. Per unit profit is equal to the profit/ units sold per item or a profit is

being computed individually as per item per sold. (Educba: Profit Formula, n.d.
3. Total Profit

Total Profit Is the net sales minus all of the sum of the cost of the goods include all

of the expenses and other costs distribution incurred by the business during the

business cycle. Total profit Is the total amount of money earned by the business or

company by selling its goods or providing services to the customers during a period of

time and deducting all the cost from the revenue to get the process and all of the

accumulated profits will be added in order to get the total profits earned by the business.

(Profit and loss - Revenue, cost and profit - GCSE Business Revision - Other - BBC

Bitesize, n.d.)

In simple terms it is defined as the accumulation of all profits gained by the business in

a short period of time.  it is the sum of all profit earned from each unit or product sold

with the total costs and expenses incurred during that period deducted from the total

amount of sale and the total of those prophets if the total profit and revenue of the

business.

4. MR=MC Rule

Is a rule for Profit maximization or the optimal output rule.  Marginal revenue or MC

equates to its marginal cost or MC.  Marginal revenue is the change in revenue due to

the result from the change of output or products produced by the company.  while on

the other hand marginal cost is   defined as the incremental cost or increasing cost of

the additional units of output. (Obaidullah, 2019)


5. TR-TC Rule

The difference between total revenue or TR and total castor TC defines the

economic profits of a business.  Total revenue defines as the price multiplied by the

number of quantities sold or the number of products sold.  while Total cost includes the

various payments and expenses incurred. Normally and preferably producers and other

business owners will choose the lowest cost of production method in their production

process and also choose the most profitable product to produce in order to achieve the

goal of maximizing the economic profit and minimizing all the other expenses.

(Economic Profit & Profit Maximization, n.d.)

References:

 Educba. Profit Formula | Calculator (Examples With Excel Template). Retrieved


on November 27,2020 from https://www.educba.com/profit-formula
 BBC Bitesize. (n.d). Profit And Loss - Revenue, Cost And Profit - GCSE Business
Revision - Other - BBC Bitesize. Retrieved on November 27, 2020 from
https://www.bbc.co.uk/bitesize/guides/zxq2hyc/revision/2> 
 Obaidullah, J., 2019.  Xplaind Profit Maximization. Retrieved on November 27,
2020 from https://xplaind.com/652936/profit-maximization-mr-equals-mc>
 Stafffullcoll.edu. n.d. Economic Profit & Profit Maximization. Retrieved on
November 27, 2020 from
http://staffwww.fullcoll.edu/fchan/Micro/3economic_profit_and_profit_maxi
mization.htm>
 Kenton, W & Barnier, B. (July 21,2020). Investopedia. Profit Definition. Retrieved
on November 27,2020 from
https://www.investopedia.com/terms/p/profit.asp

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