Total profit
a. is the difference between sales revenue and costs.
b. maximization is always the goal of every firm.
c. is always defined the same by both economists and accountants.
d. is maximized when sales are maximized.
a
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The supporters of a proposal to increase marginal taxes on those earning over $200,000 a year say this change would generate $100 billion in new tax revenues. A supply-side economist would argue that the actual revenue raised will be
A) exactly $100 billion because there are no offsetting factors to a tax increase. B) more than $100 billion, because lower income people will work harder when they perceive the tax system to be fairer. C) more than $100 billion because interest rates will also be affected. D) less than $100 billion because some people will respond by working less.
Even when a particular monetary asset is not performing one of the functions of money well, people still use the asset because
A) once an asset is defined as money it is always money. B) people expect money will come back at a later date. C) they have no choice. D) it is still easier than relying on barter.
The income elasticity of demand for bicycles is +10, which implies that bicycles are
A) an inferior good. B) a normal good. C) a substitute good for motorbikes. D) a complement good for motorbikes.
Imposing a quota on metal softball bats shipped into the United States would likely:
a. increase the price of the bats but decrease the total quantity of bats purchased in the United States. b. increase the price of the bats and the total quantity of bats purchased in the United States c. leave the price of the bats unchanged but decrease the quantity purchased in the United States. d. leave both the price of bats and the quantity purchased in the United States unchanged.