Economic profit is
A) revenue - variable costs + fixed costs.
B) revenue + variable costs - fixed costs.
C) revenue - variable costs - fixed costs.
D) revenue/cost of capital.
C
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Using the theory of wage determination, explain why wages in developing countries, where levels of capital are small, are typically quite low
Moving along the production possibilities frontier itself illustrates
A) the existence of tradeoffs. B) the existence of unemployment of some factors of production. C) the benefits of free lunches. D) how free lunches can be exploited through trade. E) how tradeoffs need not occur if the economy is efficient.
What is the endowment effect?
A) the tendency of firms to use celebrities endowed with good looks to promote their products B) the phenomenon that economic agents are endowed with different qualities and abilities so that trade among individuals increase efficiency C) the tendency of people to be unwilling to sell something they already own even if they are offered a price that is greater than the price they would be willing to pay to buy the good if they didn't already own it. D) the tendency for economic agents with abundant resources to consume a proportionately greater quantity of goods and services
Which of the following is not a property of a firm's cost curves?
a. Marginal cost must eventually rise as a result of diminishing marginal product. b. Average total cost is U-shaped. c. Economies of scale will exist when average total cost falls as output rises. d. Average total cost will cross marginal cost at the minimum of marginal cost.