To the right is the same graph we saw before but with specific values replacing the letters to help illustrate a simple profit calculation.
We show the firm producing 20 units of output, the level of output where MR = MC. At that level of output the firm sells its product for 10 per unit. This means the firm's total revenue is 10 x 20 = 200. At 20 units of output ATC = 7 so total cost is 20 x 7 = 140. So profit = TR - TC = 200 - 140 = 60. Or average profit is 10 - 7 = 3 per unit, so profit is 20 x 3 = 60.
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