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3.4 Types of Profit

Part of Production, Cost, and the Perfect Competition Model in AP® Microeconomics. Read the opening section, then create a free account for the full interactive lesson, practice, and progress tracking.

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Key Concepts of Profit

  • Profit: The financial return remaining after subtracting costs from total revenue. The formula is π=TR−TC{\pi = TR - TC}, where π{\pi} is profit and TR{TR} is total revenue and TC{TC} is total costs.

In this unit

7 lessons

  1. 3.1The Production FunctionPreview lesson
  2. 3.2Short-Run Production CostsPreview lesson
  3. 3.3Long-Run Production CostsPreview lesson
  4. 3.4Types of ProfitThis lesson
  5. 3.5Profit MaximizationPreview lesson
  6. 3.6Firms’ Short-Run Decisions to Produce and Long-Run Decisions to Enter or Exit a MarketPreview lesson
  7. 3.7Perfect CompetitionPreview lesson

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