22
QuizMultiple Choice

N/A — Exam

Question 22 • Personal Finance

What is the best definition of profit?

Answer
A
Profit is the possible income from producing an additional item.
B
Profit is the price of producing one additional unit of a good.
C
Profit is the additional income gained from selling an additional good.
D
Profit is the financial gain from business activity minus expenses.

Explanation

Profit is what remains when a business subtracts its expenses from the income it earns. For example, if a business earns $1,000 and spends $700, its profit is $300. Choice C, “the financial gain from business activity minus expenses,” gives this definition. The other choices describe ideas related to producing or selling one additional unit.

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