Economic profit can be calculated as
A) total revenue - explicit costs.
B) total revenue - implicit costs.
C) total revenue - explicit costs - implicit costs.
D) total revenue - fixed costs.
C
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The interest-rate-based transmission mechanism for monetary policy in the Keynesian system indicates that
A) decreases in the money supply lead to increases in the interest rate, which increases investment, which increases the level of real GDP. B) increases in the money supply cause people to spend more, leading to increases in real GDP. C) increases in the money supply lead to decreases in the interest rate, which decreases investment, which decreases the level of real GDP. D) increases in the money supply lead to decreases in the interest rate, which increases investment, which increases the level of real GDP.
There are five hundred buyers in the market for cheese. If we know each individual's demand curves, to find the market demand, we must
A) multiply the price times quantity for each buyer and then add the resulting products together. B) add the quantities that each buyer will purchase at every price. C) add the prices that each buyer will pay at every quantity. D) average the price each buyer is willing to pay for each given quantity. E) give up because there is no way to find the market demand.