Suppose a firm sells its product at a price lower than the opportunity cost of the inputs used to produce it. Which of the following statements is definitely true?
A. The firm will earn positive accounting and economic profits
B. The firm will face accounting and economic losses
C. The firm will face an accounting loss, but earn positive economic profits
D. The firm may earn positive accounting profits, but will face economic losses
D. The firm may earn positive accounting profits, but will face economic losses
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The rate of discount is best described as the rate of
A) return on physical capital after the cost of capital has been removed. B) return on financial assets after an inflation adjustment has been made. C) interest used to derive the present values of future sums. D) return on financial capital that has not been adjusted for inflation.
Suppose an open economy is in equilibrium. Given this information, we know with certainty that
A) G = T. B) X = IM. C) S = I. D) Y = Z.