Scenario 9.2
Consider a publicly held firm (one whose stock shares are traded on the stock exchange) that earned revenue worth $350 million and incurred land, labor, and debt costs worth $320 million. The stockholders who have invested a total of $100 million in this firm could have earned 10 percent return on other comparable investments.
-A firm's economic profit is the difference between its total revenue and total costs, including the opportunity costs of the resources used in the business.

Question

Quizplus · Accepted Answer

The statement defines the components necessary to calculate a firm's economic profit and correctly identifies it as the difference between total revenue and total costs, including opportunity costs.

Scenario 9.2 Consider a Publicly Held Firm (One Whose Stock Shares Are