ECON101: Principles of Microeconomics

Once you have fully understood that a firm maximizes profit by producing the quantity of output at which marginal revenue equals marginal cost, you are well-equipped to calculate the economic profit for that level of output by simply subtracting total cost from total revenue for that specific quantity. You can follow the explanation in the text above or in the following video. You may need to review the cost curves in Unit 6 (section 6.2.).