What Is Marginal Profit?. Marginal Cost (MC) =  (Change in Costs)/(Change in Quantity) Marginal Profit (MP) = Marginal Revenue (MR) – Marginal Cost (MC) Total Profit (TP) = Total Revenue (TR) – Total Cost (TC) Average Profit = (Total Revenue – Total Cost)/Total Quantity  We now have all the tools and information needed to answer some basic questions about the example outlined above.   (1) What is the total profit? First, let’s total the revenue. We sold 30 shirts at $30, which is 30 × $30 = $900. We then sold 30 more for $20 each, which 30 × $20 = $600. Finally, we sold 40 for $15, which is 40 × $15 = $600. Thus, the total revenue is $900 + $600 + $600 = $2100. Next, let’s total the expenses. There are two types of expenses here. The first is the fixed expense, which means it doesn’t change with the quantity produced. That’s the $200 machine. The next are the variable expenses, i.e. the ones that change with volume produced, which are $2 per shirt or $2 × 100 = $200 total. Thus, we have total costs of $200 + $200 = $400. Finally, total profit is the revenue minus expenses, or $2100 – $400 = $1700.  (2) What is the average profit of the t-shirts? We know that the total profit is $1700 and the quantity produced is 100. Therefore, the average profit is $1700/100 = $17.   (3) What is the marginal profit of the 1st, 20th, 50th, and 100th shirts? This will be easier to see in table format:  
[INST] What Is Marginal Profit? [/INST]
 Marginal Cost (MC) =  (Change in Costs)/(Change in Quantity) Marginal Profit (MP) = Marginal Revenue (MR) – Marginal Cost (MC) Total Profit (TP) = Total Revenue (TR) – Total Cost (TC) Average Profit = (Total Revenue – Total Cost)/Total Quantity  We now have all the tools and information needed to answer some basic questions about the example outlined above.   (1) What is the total profit? First, let’s total the revenue. We sold 30 shirts at $30, which is 30 × $30 = $900. We then sold 30 more for $20 each, which 30 × $20 = $600. Finally, we sold 40 for $15, which is 40 × $15 = $600. Thus, the total revenue is $900 + $600 + $600 = $2100. Next, let’s total the expenses. There are two types of expenses here. The first is the fixed expense, which means it doesn’t change with the quantity produced. That’s the $200 machine. The next are the variable expenses, i.e. the ones that change with volume produced, which are $2 per shirt or $2 × 100 = $200 total. Thus, we have total costs of $200 + $200 = $400. Finally, total profit is the revenue minus expenses, or $2100 – $400 = $1700.  (2) What is the average profit of the t-shirts? We know that the total profit is $1700 and the quantity produced is 100. Therefore, the average profit is $1700/100 = $17.   (3) What is the marginal profit of the 1st, 20th, 50th, and 100th shirts? This will be easier to see in table format:  
<sys> [INST] What Is Marginal Profit? [/INST] Marginal Cost (MC) =  (Change in Costs)/(Change in Quantity) Marginal Profit (MP) = Marginal Revenue (MR) – Marginal Cost (MC) Total Profit (TP) = Total Revenue (TR) – Total Cost (TC) Average Profit = (Total Revenue – Total Cost)/Total Quantity  We now have all the tools and information needed to answer some basic questions about the example outlined above.   (1) What is the total profit? First, let’s total the revenue. We sold 30 shirts at $30, which is 30 × $30 = $900. We then sold 30 more for $20 each, which 30 × $20 = $600. Finally, we sold 40 for $15, which is 40 × $15 = $600. Thus, the total revenue is $900 + $600 + $600 = $2100. Next, let’s total the expenses. There are two types of expenses here. The first is the fixed expense, which means it doesn’t change with the quantity produced. That’s the $200 machine. The next are the variable expenses, i.e. the ones that change with volume produced, which are $2 per shirt or $2 × 100 = $200 total. Thus, we have total costs of $200 + $200 = $400. Finally, total profit is the revenue minus expenses, or $2100 – $400 = $1700.  (2) What is the average profit of the t-shirts? We know that the total profit is $1700 and the quantity produced is 100. Therefore, the average profit is $1700/100 = $17.   (3) What is the marginal profit of the 1st, 20th, 50th, and 100th shirts? This will be easier to see in table format:   </sys