Question

What is the best definition of profit?

A. Profit is the possible income from producing an additional item.
B. Profit is the price of producing one additional unit of a good.
C. Profit is the additional income gained from selling an additional good.
D. Profit is the financial gain from business activity minus expenses.

Answer 1

d

Step-by-step explanation:

Answer 2

The correct answer is D. Profit is the financial gain from business activity minus expenses.

Step-by-step explanation:

For example a company whose business activity is selling chairs has sold 10 chairs in a month at 10 dollars each which it has bought in 6 dollars (per chair). The company has incurred 5 dollars as admin expenses and had paid 10 dollars to commercial bank as interest. So what is company profit?

Calculation.

The profit will be 25$ as shown below.

Sales (10*10) 100

Purchase (10*6) (60)

Admin expense (5)

Financial expense (10)

Profit 25