If revenues exceed ________, economic profit is ________.
A) total cost; negative
B) total cost; positive
C) variable cost; negative
D) variable cost; positive

Question

Quizplus · Accepted Answer

Economic profit is defined as total revenue minus total cost. If revenues exceed total cost, then the economic profit is positive. Therefore, option B is the correct answer as it states that if revenues exceed total cost, the economic profit is positive. Option A is incorrect because if revenues exceed total cost, the economic profit cannot be negative. Option C is incorrect because it only considers the variable cost and not the total cost. Option D is also incorrect because it suggests that economic profit is always positive when revenues exceed variable cost, which is not necessarily true.

If Revenues Exceed ________, Economic Profit Is ________

If Revenues Exceed , Economic Profit Is