Question

Suppose a firm producing coffee provides you with the following information: Price = R100 Quantity = 150 units of coffee Cost of production = R9500 Calculate the total revenue of the firm. (1) Is the firm currently making a profit or loss? Explain.

Answer 1

The total revenue of the firm is:

$TR = 100×150 = R15,000.$

Total profit is:

$TP = TR - TC = 15,000 - 9,500 = R5,500.$