Question

If KFC’s cost was $5,000, their demand was 3,200, their revenue was $1.95 per piece of chicken what is their net profit.

A) $1.248
B) $1,240
C) $2,480
D) $6,240
E) $6,550

Answer 1

To determine the net profit for KFC, multiply the demand by the revenue per piece to get the total revenue, then subtract the cost from the total revenue. The calculated net profit is $1,240.

Step-by-step explanation:

To calculate the net profit for KFC, we need to subtract the total costs from the total revenues. First, we calculate total revenues by multiplying the demand (number of units sold) by the revenue per unit. Then, we compare this to the total costs of production.

Let's find the total revenue: 3,200 (demand) × $1.95 (revenue per piece) = $6,240 (total revenue).

Next, we determine the net profit by subtracting the costs from the total revenue: $6,240 (total revenue) - $5,000 (cost) = $1,240 (net profit).

Therefore, the net profit is $1,240.