From the course: Preparing for the GMAT
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Profit problems
- [Instructor] So word problems don't get much more businesslike than profit word problems. So these are questions that deal with concepts like revenue, costs, expenses, and of course profit. So in this video, we'll look at a basic profit word problem. So I'm going to just write that definition of profit, so profit equals revenue minus expenses. Hopefully that makes sense, it's all the money you take in, minus your expenses or your costs. That'll give you what's left over, AKA your profit. So let's read this. A startup brings you a proposal for their new product, each unit is going to sell for $20 and cost them $5 to produce, but they're going to need to spend $45,125 to get started. How many units will they need to sell to come out with a profit of $100,000? Okay, well in the beginning, they're going to be down $45,125, so if you think about it, they need to make profit to cover that, and then make $100,000 more. So the total amount they need to profit is $100,000 plus this amount…
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