Given: Sales of $10 million; implicit costs of $2 million; and explicit costs of $5 million. Find (a) accounting profit; (b) economic profit.
What will be an ideal response?
Sales ($10 million) - Explicit Costs ($5 million) = Accounting Profit ($5 million). Accounting Profit ($5 million) - Implicit Costs ($2 million) = Economic Profit ($3 million)
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a. True b. False Indicate whether the statement is true or false
The short-run Phillips curve shows that: a. the economy can have low inflation and low unemployment simultaneously
b. the economy can have high per-capita income and high interest rate simultaneously. c. a reduction in per-capita income comes at the expense of lower inflation. d. a reduction in unemployment comes at the expense of higher inflation. e. a reduction in inflation comes at the expense of lower exchange rate.
One of the defining characteristics of an oligopoly is that:
A. the strategic interactions between a firm and its rivals have a major impact on its profits. B. there are only a few buyers in the market. C. there are no barriers to entry to the market. D. no single firm has an impact on the market as a whole.
If a price floor is set below the equilibrium price,
A. there will be a surplus. B. there will be a shortage. C. quantity demanded will be less than quantity supplied. D. the floor will be ineffective.