WAEC Economics 2017 Paper

Concept:A firm's total revenue is obtained by adding total cost to its profit.Explanation:Let profit be $\pi$, total revenue be $TR$, and total cost be $TC$.The basic relation is $\pi = TR - TC$.Rearranging gives $TR = \pi + TC$.Total cost is the sum of fixed and variable costs:$TC = TFC + TVC$.Therefore, $TR = \pi + TFC + TVC$.This shows that total revenue can be recovered by adding total cost, not just one part of it, to profit.Since the options offer total variable cost and total fixed cost separately, both are needed together to make up the total cost that should be added.Answer:Profit + Total Cost $=$ Total Revenue.So the correct addition is total cost, which requires both total variable cost and total fixed cost together.