Question

The profit margin is ________.

A. also the average profit.
B. the price minus the average cost.
C. the total profit divided by the quantity produced
D. all of the above

Answer 1

Option (D) is correct.

Step-by-step explanation:

Profit margin refers to the earnings of a producer on every unit sold in the market.

The profit margin is calculated by dividing the total profit by the total quantity produced.

Profit margin = Total profit ÷ Quantity produced

Above formula says that profit margin gives us the per unit profit and the average profit also shows the per unit profit.

Profit margin = Price - Average cost ⇒ This will also gives us the per unit profit.