{"id":51124,"date":"2024-04-15T23:20:16","date_gmt":"2024-04-15T23:20:16","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=51124"},"modified":"2024-04-15T23:20:16","modified_gmt":"2024-04-15T23:20:16","slug":"the-average-profit-is-the-difference-between","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-average-profit-is-the-difference-between\/","title":{"rendered":"The average profit is the difference between"},"content":{"rendered":"

[amp_mcq option1=”AC and TC” option2=”AC and VC” option3=”AC and AR” option4=”AC and TR” correct=”option3″]<\/p>\n

The correct answer is: C. AC and AR<\/strong><\/p>\n

Average profit is the profit per unit of output. It is calculated by dividing total profit by the number of units produced.<\/p>\n

Average cost (AC) is the cost per unit of output. It is calculated by dividing total cost by the number of units produced.<\/p>\n

Average revenue (AR) is the revenue per unit of output. It is calculated by dividing total revenue by the number of units produced.<\/p>\n

Therefore, average profit is equal to average revenue minus average cost.<\/p>\n

\n

Option A: AC and TC<\/strong><\/p>\n

Total cost (TC) is the total amount of money that a company spends to produce a certain number of goods or services. It includes both fixed costs and variable costs. Fixed costs are costs that do not change with the number of units produced, such as rent and insurance. Variable costs are costs that change with the number of units produced, such as the cost of raw materials.<\/p>\n

Average cost (AC) is the cost per unit of output. It is calculated by dividing total cost by the number of units produced.<\/p>\n

Therefore, average profit is not equal to average cost and total cost.<\/p>\n

\n

Option B: AC and VC<\/strong><\/p>\n

Variable cost (VC) is the cost of producing one unit of output. It includes all the costs that change with the number of units produced, such as the cost of raw materials.<\/p>\n

Average variable cost (AVC) is the variable cost per unit of output. It is calculated by dividing variable cost by the number of units produced.<\/p>\n

Therefore, average profit is not equal to average cost and variable cost.<\/p>\n

\n

Option D: AC and TR<\/strong><\/p>\n

Total revenue (TR) is the total amount of money that a company receives from selling a certain number of goods or services. It is calculated by multiplying the price of each unit by the number of units sold.<\/p>\n

Average revenue (AR) is the revenue per unit of output. It is calculated by dividing total revenue by the number of units produced.<\/p>\n

Therefore, average profit is equal to average revenue minus average cost.<\/p>\n","protected":false},"excerpt":{"rendered":"

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