Lesson 4.1.4.7

4.1.4.7 Profit Quiz: AQA Economics, Unit 1

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 4.1.4.7, Profit: 20 multiple choice questions for the AQA Economics (7136), Unit 1: Individuals, firms, markets and market failure, written with Revision Ninja.

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The 20 questions

  1. How is total profit calculated for a firm?

    • Revenue minus costs
    • Output minus input
    • Revenue plus costs
    • Price minus cost

  2. What is the minimum profit needed to keep a firm in its current industry?

    • Normal profit
    • Supernormal profit
    • Subnormal profit
    • Accounting profit

  3. What type of profit is earned when total revenue exceeds total opportunity costs?

    • Accounting loss
    • Normal profit
    • Supernormal profit
    • Subnormal profit

  4. What main role does profit play in a market economy?

    • Control inflation
    • Allocate resources
    • Equalise incomes
    • Maximise tax revenue

  5. What costs are deducted in economic profit but excluded from accounting profit?

    • Fixed costs
    • Variable costs
    • Explicit costs
    • Implicit costs

  6. If a firm has total revenue of £500,000 and total costs of £430,000, its profit is:

    • £930,000
    • £70,000
    • £500,000
    • £430,000

  7. What enters a competitive market when existing firms earn supernormal profit?

    • Price controls
    • New firms
    • Government subsidies
    • New taxes

  8. A firm sells 2,000 units at £12 each and has total costs of £19,500. Its profit is:

    • £24,000
    • £19,500
    • £43,500
    • £4,500

  9. A firm earns £80,000 accounting profit and has £25,000 implicit costs. Calculate economic profit.

    • £25,000
    • £55,000
    • £80,000
    • £105,000

  10. A firm sells 1,000 units at £70 each with total costs of £60,000. What is profit per unit?

    • £70
    • £60
    • £100
    • £10

  11. What happens to long-run market price when new firms enter an industry?

    • Demand rises
    • Price falls
    • Price rises
    • Costs fall

  12. What level of economic profit is made when total revenue equals total opportunity costs?

    • Positive
    • Zero
    • Infinite
    • Negative

  13. Which pricing strategy deliberately accepts lower short-run profit to deter market entrants?

    • Predatory pricing
    • Price discrimination
    • Cost-plus pricing
    • Limit pricing

  14. A firm sells 4,000 units at £15 each. Fixed costs are £18,000 and variable cost is £4 per unit. Its profit is:

    • £42,000
    • £26,000
    • £60,000
    • £34,000

  15. If percentage profit growth exceeds percentage revenue growth, what must have happened to costs?

    • Grew slower
    • Stayed constant
    • Fell to zero
    • Grew faster

  16. A firm with total revenue of £300,000 and total costs of £285,000 cuts costs by £20,000 without changing output or price. Its profit becomes:

    • £50,000
    • £15,000
    • £20,000
    • £35,000

  17. A firm has £40,000 accounting profit and £50,000 implicit costs. What is its economic profit?

    • £90,000
    • -£90,000
    • £10,000
    • -£10,000

  18. Which factor is ignored when using profit as the sole measure of firm performance?

    • Average revenue
    • Environmental impact
    • Total revenue
    • Marginal cost

  19. In long-run equilibrium under perfect competition, price equals which cost metric?

    • Average total cost
    • Marginal cost only
    • Total cost
    • Average fixed cost

  20. A firm earns £12,000 profit on total revenue of £80,000. Its profit margin is:

    • 15%
    • 85%
    • 66.7%
    • 12%

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