Mario's company definitely has economic losses in which of the following situations?
A)Total costs exceed total revenue.
B)Implicit opportunity costs exceed direct financial costs.
C)Total revenue exceeds direct financial costs.
D)Total revenue exceeds implicit opportunity costs.

Question

Quizplus · Accepted Answer

Economic losses occur when total costs exceed total revenue. In this situation, the company is not generating enough revenue to cover its expenses, resulting in a loss. Implicit opportunity costs and direct financial costs are important factors to consider in determining the profitability of a business, but they do not necessarily indicate economic losses. Total revenue exceeding implicit opportunity costs may indicate a profit, but it is important to consider whether the direct financial costs are also covered.

Mario's Company Definitely Has Economic Losses in Which of the Following