Which of the following is the formula used for computing an accounting profit?
A) accounting profits = total revenue - implicit costs
B) accounting profits = total revenue - (implicit + explicit costs)
C) accounting profits = total costs - total revenue
D) accounting profits = total revenue - explicit costs
D
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A payday loan company has decided to open several new locations in the city. To decide where to open these locations it hires consultants and pays them per store opened. At the end of the quarter, the company notices a many of the new stores' sales volume fail to meet expectations. To incentivize the consultants to instead focus on opening profitable stores, the company has decided to alter the
compensation to a percentage of the profit earned per new store. The company should expect to a. Pay the consultants more than they would per store b. Pay the consultants less than they would per store c. Pay the consultants the same d. None of the above
When the long-run average total cost curve is increasing, this means that there are
a. economies of scale b. diseconomies of scale c. constant returns to scale d. diminishing returns e. some fixed factors of production