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 (\$)

## How to Calculate Average Profit?

The following example problems outline how to calculate Average Profit.

Example Problem #1:

1. First, determine the average revenue (\$). In this example, the average revenue (\$) is given as 65.
2. Next, determine the average cost (\$). For this problem, the average cost (\$) is given as 5.
3. 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 (\$)