Which of the following statements is true about profit?
A) Profit refers to the revenue received from the sale of a quantity of goods.
B) The terms "accounting profit" and "economic profit" can be used interchangeably.
C) Profit is calculated by multiplying price and quantity sold.
D) Profit is the difference between revenue and cost.
D
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If a shortage of a good exists in the market,
a. the price is higher than its equilibrium level b. the quantity demanded is less than the quantity supplied c. the quantity demanded exceeds the quantity supplied d. there is an excess supply of the good e. the price will fall
For a particular good, a 5 percent increase in price causes a 2 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
a. There are many close substitutes for this good. b. The good is a luxury. c. The market for the good is broadly defined. d. The relevant time horizon is long.