Suppose that a business incurred implicit costs of $500,000 and explicit costs of $5 million in a specific year. If the firm sold 100,000 units of its output at $50 per unit, its accounting:
A. profits were $100,000 and its economic profits were zero.
B. losses were $500,000 and its economic losses were zero.
C. profits were $500,000 and its economic profits were $1 million.
D. profits were zero and its economic losses were $500,000.
Answer: D
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Apple, the consumer electronics giant, on Tuesday rolled out new versions of its popular iPhone. The CEO decided to decrease the price of iPhones in an attempt to increase total revenue from iPhone sales
One of his employees, Jess, disagrees and suggests that an iPhone price increase will increase total revenue. Who is CORRECT? A) The CEO is correct if demand is price elastic. B) The CEO is correct if demand is price inelastic. C) Jess is correct if demand is price elastic. D) Jess is correct if demand is unit elastic.
In the short run, a monopolist will always shut down when
a. total cost is greater than total revenue at all output levels b. total variable cost is greater than fixed cost c. total revenue is greater than total variable cost at all output levels d. fixed cost is greater than total revenue at all output levels e. total variable cost is greater than total revenue at all output levels