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Economic Profit (Microeconomics) Calculator

LAST UPDATE: August 26th, 2018

Calculator

Profit (from total)

Profit (from average)

What is economic profit?

Economic profit is the method of calculating profit including both explicit and implicit costs.

Where accounting profit is used primarily for tax purposes, economic profit is used to determine the current value.

Formula

Economic Profit (from total) = Revenue – Costs

Economic Profit (from average) = (Average Revenue – Average Cost) x Quantity

Example

From Total – Revenue is $500,000 and costs are $400,000.

Profit (from total) = $500,000 – $400,000 = $100,000

From Average – Average Revenue is $100, average costs are $35, and quantity is 400.

Profit (from average) = ($100 – $35) x 400 = $65 x 400 = $26,000

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