Understanding Profit and Increasing Business Profits

The video tutorial explains the concept of profit as the difference between revenue and costs. It breaks down the profit equation into its components, including fixed and variable costs. Using a pizza restaurant example, the video demonstrates how to calculate profit by determining revenue and subtracting total costs. It also discusses strategies for increasing profit, such as reducing costs and increasing revenue, while highlighting potential trade-offs and challenges businesses face in achieving these goals.

What is the basic equation for calculating profit?

• Profit = Revenue + Cost

• Profit = Cost / Revenue

• Profit = Cost - Revenue

• Profit = Revenue - Cost

How is revenue calculated in the profit equation?

• Revenue = Fixed Costs + Variable Costs

• Revenue = Profit + Costs

• Revenue = Volume / Price

• Revenue = Price x Volume

In the pizza restaurant example, what are the fixed costs per week?

• £3,200

• £10,000

• £9,200

• £6,000

What is the total revenue generated by the pizza restaurant per week?

• £6,000

• £3,200

• £10,000

• £9,200

What is the total cost incurred by the pizza restaurant per week?

• £6,000

• £3,200

• £9,200

• £10,000

Which of the following is a method to increase profit?

• Increase costs

• Increase both costs and revenue

• Decrease revenue

• Reduce costs

What is a potential trade-off when trying to increase revenue?

• Increased variable costs

• Reduced fixed costs

• Decreased marketing costs

• Improved product quality