If your business earns $10,000 in revenues, has explicit costs of $7,000, and implicit costs of $5,000, your economic profit is
A) $2,000.
B) -$2,000.
C) $5,000.
D) $3,000.
B
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The more elastic the demand facing a firm,
A) the higher the value of the Lerner index. B) the lower the value of the Lerner index. C) the less monopoly power it has. D) the higher its profit.
Which of the following statements is correct?
a. The market for capital is unlike the market for labor because the rental price of capital is unaffected by the marginal product of capital, whereas the price of labor is affected by the marginal product of labor. b. The market for capital is unlike the market for labor because the purchase price of capital is unaffected by the marginal product of capital, whereas the price of labor is affected by the marginal product of labor. c. The market for capital is like the market for labor because the rental price of capital is affected by the marginal product of capital, and the price of labor is affected by the marginal product of labor. d. Both a and b are correct.