The economy's current rate of interest is 10 percent and a firm has $10,000 of owner-invested capital. Its total revenue is $5000 and the firm's explicit costs are $3500. From this we know that this firm's
A) accounting profit is $500.
B) economic profit is $1,500.
C) accounting profit is $1,500.
D) economic profit is $5,000.
C
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When a firm ignores the opportunity cost of capital when making investment or shutdown decisions, this is a case of
a. Fixed-cost fallacy b. Sunk-cost fallacy c. Hidden-cost fallacy d. None of the above
Does the benefits received principle work well for all public goods?
If few people have the skill required for a job, it will pay less.
Answer the following statement true (T) or false (F)
The income effect means that when the price of a good rises
A. you buy more normal goods and fewer inferior goods. B. the buying power of your income falls. C. your preferences also change. D. consumers have an incentive to consume less of the good with a relatively higher price and more of the good with a relatively lower price.