Profit is the difference between total revenue and total costs
Profit is what a firm keeps after paying all its costs. A firm earns it when the money from sales exceeds everything it spent to produce those goods or services.
Formula
Profit = TR − TC
Real World
In 2023, Tesco reported revenues of over £65 billion but, after subtracting wages, stock, rent, and logistics costs, retained a much smaller profit — illustrating that high revenue does not automatically mean high profit.
Exam Focus
Distinguish between profit and revenue in your answer — conflating the two is a common error that loses marks.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
How well did you know this?