Which of the following statements is true?
A. Accounting profit is always positive.
B. Economic profit is always positive.
C. Accounting profit is greater than or equal to economic profit.
D. Economic profit is greater than or equal to accounting profit.
Answer: C
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Which of the following is true for BOTH monopoly and a perfectly competitive firm?
A) The demand for the individual firm's product is perfectly elastic. B) Economic profits can be sustained indefinitely over time. C) The marginal revenue curve is horizontal at the market equilibrium price. D) Profits are maximized by producing at the level of output where marginal revenue is equal to marginal cost.
When RBC economists work out a detailed numerical example of a more general theory, they are performing
A) econometrics. B) number theory. C) calibration. D) topology.