2. Calculations 1. 2.1 If a firm sells 400 burgers at 3.20 per unit, and 50 burger meals at 5 each, what is its total revenue? 2.2 If each burger costs 1.20 to make and each meal costs 1.50 to make, what are the total variable costs? 2.3 If fixed costs are 400, what profit is the business making? 3. Explain exactly how the following changes might affect profit 3.1 A firm in a highly competitive industry increases its prices by 10% 3.2 The demand for a hat firm's tennis caps falls by 25% due to changing fashions. 3.3 New production methods increase a firm's productivity. 4. Profit. True or false? 4. Increasing the price of a product will increase the profit made by that business 42 Profit is calculated by the formula: Total revenue - total costs 43 If total costs exceed total revenue, the firm will make a loss 444 Increasing advertising will result in an increase in profit 5. Calculations 2 5.1 Jeff's Jukeboxes Ltd has sales of 500 units a month, a price of 1,000, fixed costs of 120,000 and variable costs of 700 per unit. Calculate its profit. b) What profit will be made at 20,000 units if the selling price is 6