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Economic profit = accounting profit - the
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- (29. At 100 output, marginal revenue is less than marginal cost) True False 30. In relation to question number 29, producer should produce more up to 440. True FalseThere are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices. a. ABC gained market power through a.economies of scale b.government protection c.control of an important input . b. ABC’s market power a.does b.does not guarantee that the firm makes an economic profit.In a "perfectly competitive" market, each business is selling a product that is very similar (maybe identical) to the product of other businesses in the market. Group of answer choices True False
- Normal profit: Group of answer choices 1is earned when economic profit equals opportunity costs 2is shown in a firm’s financial (accounting) statements 3is a zero economic profit 4is earned when total revenues exceed total costs that include also opportunity costsWhat is Normal Profit? Normal Profit is equal to the “Reasonable Rate of Return” for the market. Normal Profit is equal to the highest “opportunity cost” available to the producer even if that profit level is above the “Reasonable Rate of Return” for the market Economic Profit is Normal Profit minus what profit would have been at the highest opportunity cost. Economic Profit can be above, below or equal to Normal Profit Both A and CWhat can we say a firm receives if the price exceeds the marginal cost? Group of answer choices A Royalty payments B Consumer surplus C Scarcity rent D Money Hotelling’s rule has generally not proven accurate due to new discoveries and technological True or false
- The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential earnings as a salaried worker = $55,000 Annual lease on building = $23,000 Annual revenue from operations = $320,000 Payments to workers = $130,000 Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Creamy Crisp Donut Company Multiple Choice has lower explicit costs, than implicit costs. is earning a normal profit but not an economic profit. is earning an economic profit. is suffering an economic loss, when implicit costs are considered.If there are significant economies of scale in an industry, then Multiple Choice a firm that is large may be able to produce at a lower unit cost than can a small firm. a firm that is large will have to charge a higher price than will a small firm. entry to that industry will be easy. firms must differentiate their products to earn economic profits.In the short run, a firm will produce a positive amount of output as long as _____ Group of answer choices price exceeds average variable cost. price is less than average variable cost. fixed cost exceeds total revenue. price exceeds marginal cost. average variable cost is less than average total cost.
- There are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices. a. ABC gained market power through economies of scale government protection control of an important input . b. ABC’s market power does does not guarantee that the firm makes an economic profit.If a firm is producing at a quantity in which the marginal cost exceeds marginal revenue, the firm _____. Question 15 options: a must decrease output to increase profit b must increase output to increase profit c is maximizing profit d must shut-down to increase profitThe fact that perfectly competitive firms have ______ creates a level of output that is allocatively efficient. Question 5 options: no ability to set the price a differentiated product perfect information free entry and exit asymmetric information