Final answer:
The profit equation calculates profit by subtracting total cost from total revenue. For 180 disc players sold at a price of $16, with an average cost of $14.50 per unit, the profit can be calculated by multiplying the profit per unit by the total number of units sold.
Step-by-step explanation:
The profit equation is a fundamental concept in business and economics used to determine the profitability of selling goods or services. It is simply the difference between total revenue and total cost at a given level of output, where profit equals total revenue minus total cost. To calculate profit, we can look at a specific example provided: when a hypothetical store sells 40 disc players at a price of $16 each, the total revenue is $640, and the total cost is $580, resulting in a profit of $60.
Using this understanding, we can calculate the profits for 180 disc players. Assuming the average cost remains the same and the selling price does not change, the firm would make the same profit per disc player as it did for 40 units. Therefore, for 180 disc players, we would first calculate the total revenue by multiplying 180 by the selling price ($16), and then subtract from this the total cost, which would be 180 times the average cost per unit ($14.50). The resulting figure would provide us with the total profit for 180 disc players.