Question

And Prices

Apply Concepts Suppose a firm's hourly fixed costs of production equal $40 per hour, its variable costs equal $125 per hour, and its total
revenue is $275. What is the firm's profit per hour? How did you get your answer?
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Answer 1

$110

Step-by-step explanation:

Profit is obtained by subtracting costs from revenues.

i.e., revenues -costs = profits

In this case:

Revenue is $275,

Costs, fixed costs $40: variable cost , $125

Profits = $275- ( $40 + $125)

Profits = $275 - $165

Profits = $110