Enter the average revenue, average cost, and total quantity into the calculator. The calculator will determine the total economic profit of the good or service.
- Profitability Index Calculator
- Net Profit Margin Calculator
- Accounting Profit Calculator
- Target Profit Calculator
Economic Profit Formula
The following equation can be used to calculate the total economic profit earned from a good or service.
EP = (R – C) x Q
- Where EP is the economic profit
- R is the average revenue
- C is the average cost
- Q is the total quantity sold
Economic Profit Definition
Economic profit is the difference between the revenue from the sale of a good or service and the associated costs. Those associated costs include things like opportunity cost.
Economic Profit Example
How to calculate economic profit?
- First, determine the average revenue.
Calculate the total average revenue per unit.
- Next, determine the average cost.
Calculate the average cost per unit.
- Next, determine the total quantity sold.
Calculate the total quantity of goods sold.
- Finally, calculate the economic profit.
Calculate the economic profit using the formula above.
Economic profit is a measure of the difference between the economic revenue and economic costs.