Lesson 3.3.1

3.3.1 Revenue, profit and types of profit Quiz: OCR Economics, Unit 3

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 3.3.1, Revenue, profit and types of profit: 20 multiple choice questions for the OCR Economics (H460), Unit 3: Business objectives, written with Revision Ninja.

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The 20 questions

  1. What is average revenue equal to for any firm selling a single product?

    • Fixed cost
    • Product price
    • Total profit
    • Marginal cost

  2. How is marginal revenue defined in economic theory?

    • Total sales revenue
    • Revenue divided by price
    • Profit per unit sold
    • Extra revenue per unit

  3. What level of profit is considered a cost of production in economics?

    • Normal profit
    • Supernormal profit
    • Gross profit
    • Accounting profit

  4. Which condition describes a firm making supernormal profit?

    • AR equals AC
    • MR equals MC
    • TR equals TC
    • TR exceeds TC

  5. What term describes profit achieved when total revenue is less than total cost?

    • Subnormal profit
    • Normal profit
    • Windfall profit
    • Supernormal profit

  6. How is economic profit calculated by a firm?

    • TR minus TC
    • TR plus TC
    • MR minus MC
    • AR minus AC

  7. What key function does profit perform in a market economy?

    • Allocating resources
    • Reducing interest rates
    • Fixing price ceilings
    • Setting tax rates

  8. What is the shape of the average revenue curve for a price-taking firm?

    • Upward sloping
    • Downward sloping
    • Horizontal
    • Vertical

  9. What is the shape of the average revenue curve for a price-setting firm?

    • Downward sloping
    • U-shaped
    • Vertical
    • Horizontal

  10. Where does the marginal revenue curve lie relative to a downward-sloping average revenue curve?

    • Above average revenue
    • Below average revenue
    • Parallel to average revenue
    • Equal to average revenue

  11. A firm sells 500 units at £10 each. What is its total revenue?

    • £50,000
    • £5,000
    • £500
    • £50

  12. Total revenue rises from £100 to £125 when output increases by one unit. What is marginal revenue?

    • £25
    • £125
    • £100
    • £225

  13. A firm has a total revenue of £50,000 and total costs of £35,000. What is its profit?

    • £35,000
    • £85,000
    • £15,000
    • £20,000

  14. Which profit measure includes both explicit and implicit costs of production?

    • Economic profit
    • Operating profit
    • Accounting profit
    • Gross profit

  15. A firm covers all explicit costs and opportunity costs exactly. Which profit is made?

    • Normal profit
    • Monopoly profit
    • Subnormal profit
    • Supernormal profit

  16. A firm earns total revenue of £800 from selling 40 units. What is its average revenue?

    • £32,000
    • £20
    • £40
    • £200

  17. At what point is total revenue maximised along a downward-sloping demand curve?

    • Average revenue is zero
    • Price is zero
    • Marginal revenue is zero
    • Marginal revenue is maximised

  18. What is the price elasticity of demand when marginal revenue is exactly zero?

    • Perfectly elastic
    • Unit elastic
    • Perfectly inelastic
    • Relatively inelastic

  19. How does accounting profit differ from economic profit?

    • Excludes explicit costs
    • Ignores tax payments
    • Includes total revenue
    • Excludes implicit costs

  20. What is marginal revenue when total revenue is falling as output increases?

    • Positive
    • Negative
    • Constant
    • Zero

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