Lucinda starts a business consulting company. She makes all the business decisions and bears the risk of running the business. The typical payment for Lucinda's work is ________
A) all the revenue greater than her opportunity cost
B) all the revenue greater than the capital investment
C) a normal profit
D) an economic profit
C
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Refer to Figure 4.5. If all 10 students choose Dash, each student will earn ________ extra points
A) 0 B) 2 C) 4 D) 6
Suppose the local government is considering using marginal cost pricing to set rates for a cable TV company. Which of the following arguments supports marginal cost pricing?
a. Marginal cost pricing gives the monopoly economic profit and a reason to stay in business. b. Marginal cost pricing gives the firm a normal economic profit and a reason to stay in business. c. Marginal cost pricing is allocatively efficient. d. Average cost pricing requires subsidies, which can be costly. e. Average cost pricing forces monopolies to operate at a loss.