Economic profit
a. does not exist in competitive markets.
b. provides an incentive for investors to undertake risky projects.
c. motivates entrepreneurial innovation.
d. does all of the above.
e. is both b and c.
E
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Managers need all of the following information to determine if the firm should make or buy an input except which one?
A) the salvage rate of the equipment to make the input B) the quantity of the input the firm needs each year C) the firm's discount rate D) the present value of the firm's current profit
When looking at a graph of nominal and real interest rates you notice the graph for nominal rates and the graph for real rates cross each other many times. From this you conclude
a. consumer prices sometimes rose and sometimes fell in the time frame represented on the graph. b. consumer prices were always rising in the time frame represented on the graph. c. the economy never experienced a recession in the time frame represented on the graph. d. GDP was always increasing for the time frame represented on the graph.
Who determines the price and quantity traded in a market?
A. buyers and sellers B. buyers C. sellers D. prices and quantities traded are not generally determined in markets
The firm’s average cost curve is the result of cost minimization in the use of fixed inputs.
Answer the following statement true (T) or false (F)