Enter the average revenue ($) and the average cost ($) into the calculator to determine the Average Profit.

## Average Profit Formula

The following formula is used to calculate the Average Profit.

Pave = AR - AC

- Where Pave is the Average Profit ($)
- AR is the average revenue ($)
- AC is the average cost ($)

To calculate the average profit, simply subtract the average cost from the average revenue.

## How to Calculate Average Profit?

The following example problems outline how to calculate Average Profit.

**Example Problem #1:**

- First, determine the average revenue ($). In this example, the average revenue ($) is given as 65.
- Next, determine the average cost ($). For this problem, the average cost ($) is given as 5.
- Finally, calculate the Average Profit using the equation above:

Pave = AR – AC

The values given above are inserted into the equation below:

Pave = 65 – 5 = 60.00 ($)

**Example Problem #2: **

The variables needed for this problem are provided below:

average revenue ($) = 70

average cost ($) = 8

Entering these values and solving gives:

Pave = 70 – 8 = 62.00 ($)