A certain firm produces and sells potato chips.Last year it sold 3 million bags of chips at a price of $3 per bag.For last year,the firm's
A) accounting profit was $9 million.
B) economic profit was $9 million.
C) total revenue was $9 million.
D) explicit costs was $9 million.

Question

Quizplus · Accepted Answer

Total revenue is calculated by multiplying the quantity sold (3 million) by the price per bag ($3), which equals $9 million. Accounting profit would look at revenue minus explicit costs (such as wages and materials), while economic profit would take into account both explicit and implicit costs (such as the opportunity cost of the owners' time and resources). However, since we are only given information about revenue and not costs, we cannot conclude anything about the firm's accounting or economic profit.

A Certain Firm Produces and Sells Potato Chips