Economic profit
A) is a theoretical measure of a firm's performance and has little value in real world decision making.
B) can be calculated by subtracting implicit costs of using owner-supplied resources from the firm's total revenue.
C) is negative when costs exceed revenues.
D) is generally larger than accounting profit.
Correct Answer:
Verified
Q3: value of a firm is
A)smaller the higher
Q4: In a perfectly competitive market,
A) all firms
Q5: Economic profit is
A) the difference between total
Q6: A price-setting firm
A) can lower the price
Q7: A risk premium is
A) a measure calculated
Q8: Consider a firm that employs some resources
Q9: Which of the following statements is true?
A)
Q10: The principal-agent problem arises when
A) the principal
Q11: Moral hazard
A) occurs when managers pursue maximization
Q12: When economic profit is positive,
A) total revenue
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