INSIGHT UPSC QUIZ

GS Economy Economic Concepts
Q.

 Consider the following statements:

1. Profit is the difference between total revenue and total cost.

2. With the increase in output the total profit of the company always increases.

Which of the statement(s) given above is/are correct?

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Explanation:

ANSWER: (A) 

  • Statement 1 is correct.

Profits are the difference between total revenue and total cost. Both total revenue and total cost increase as output increases. 

  • Statement 2 is not correct.

Notice that as long as the change in total revenue is greater than the change in total cost, profits will continue to increase. 

Attempted by 2235 Users

88% Marked Correct

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