Which calculation gives the firm’s profit margin?
a. Average profit = price × average cost
b. Average profit = price ÷ average cost
c. Average profit = price + average cost
d. Average profit = price – average cost
d. Average profit = price – average cost
If we divide profit by the quantity of output produced, we get average profit, also known as the firm’s profit margin. This is the same as the price minus the average cost. Therefore, profit margin can be expressed as: average profit = price – average cost.
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If the rate of job finding rises, the natural rate of unemployment will:
A. remain constant. B. increase. C. decrease. D. rise or decline, depending on the rate of job separation.
Suppose that an economy's labor productivity fell by 3 percent and its total worker-hours remained constant between year 1 and year 2. We could conclude that this economy's:
A. real GDP declined. B. capital stock increased. C. production possibilities curve shifted outward. D. actual production moved from one point to another on a fixed production possibilities curve.