Profit is total revenue minus total cost. To read a table, calculate that gap in every row, then find where it is zero and where it is largest.
This lesson belongs to production and costs. It assumes you can already separate total, average and marginal figures.
What do I calculate in each row?
Use three formulas, and apply them row by row.
- Total revenue (TR) = price × quantity.
- Total cost (TC) = fixed cost + variable cost, often given directly.
- Profit = TR − TC.
If the price is constant, TR rises by the same amount with every extra unit. Costs may not behave that way, which is why profit peaks and then falls.
Worked example: a fictional kuih stall
The stall sells boxes of kuih at RM4 each. Its costs come from the supplied table.
| Boxes | TR (RM) | TC (RM) | Profit (RM) |
|---|---|---|---|
| 10 | 40 | 70 | −30 |
| 20 | 80 | 95 | −15 |
| 30 | 120 | 120 | 0 |
| 40 | 160 | 150 | 10 |
| 50 | 200 | 195 | 5 |
Sample working: at 40 boxes, TR = 4 × 40 = 160, and profit = 160 − 150 = RM10. At 30 boxes, TR equals TC, so profit is zero.
The stall breaks even at 30 boxes. The largest profit is RM10 at 40 boxes.
Why is 50 boxes not the best choice?
At 50 boxes, TR is highest at RM200, but TC has jumped from RM150 to RM195. The extra 10 boxes add RM40 to revenue and RM45 to cost, so profit falls by RM5.
The table tells this story row by row. Revenue alone hides the cost rise, and that is the trap.
A careful sentence reads: “Profit is greatest at 40 boxes (RM10). Beyond this, the cost of producing more rises faster than the revenue, so the profit falls to RM5 at 50 boxes.”
The mistake that costs marks
The common slip is to name the output with the highest revenue as the best output. It feels natural, since more sales sound good.
A second slip is forgetting to state the sign. A profit of −RM30 is a loss of RM30, and writing “profit of RM30” reverses the meaning.
The fix is a final check line: “The best row is the one with the largest profit, and I have compared all rows.”
Check yourself
A fictional stall sells cups of juice at RM10 each. For 5, 10, 15, 20 and 25 cups, total cost is RM80, RM110, RM140, RM185 and RM250. Find the most profitable output and its profit, and say what happens at 25 cups.
Answer
TR = RM50, 100, 150, 200, 250 for the five outputs.
Profit = −30, −10, +10, +15 and 0.
The most profitable output is 20 cups, with RM15 profit.
At 25 cups, TR = TC = RM250, so the stall breaks even with zero profit, because costs rose by RM65 while revenue rose by only RM50.
What to study next
Take the four skills together in the production and costs practice set. For harder supplied tables with a missing value, try cost and productivity from a supplied table.
If you want a teacher to check your table reading live, see online one-to-one Economics tuition.