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The Owners of a Firm Are Earning Economic Profit If

Question 136

Multiple Choice

The owners of a firm are earning economic profit if


A) return on their capital is lower than the opportunity cost of employing that capital in their industry.
B) their total revenues exceed the monetary payments to labor and other resources in the long run after all plant size adjustments are made.
C) price exceeds average variable costs at the shutdown point.
D) they are earning a return on their capital that is higher than what can generally be earned in other markets.

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