Which of the following is true of profits and losses?
A) Profits direct entrepreneurs toward production of goods that are highly valued relative to their cost, while losses direct them away from wealth-reducing activities.
B) Profits indicate that the firm is charging prices that are too high, while losses indicate that the firm needs to raise its prices.
C) Profits indicate that the consumer is getting a bad deal, while losses indicate that the consumer values the product highly relative to its cost.
D) Profits indicate that the suppliers of resources are underpaid, while losses indicate they are overpaid.

Question

Quizplus · Accepted Answer

Profits signal that resources are being used efficiently to produce goods that consumers value more than their cost, while losses indicate that resources could be better used elsewhere.

Which of the Following Is True of Profits and Losses