How do economists view profits?
A) Profits are an asset the business holds.
B) Profits are one of the costs paid to a factor of production.
C) Profits are guaranteed as long as a firm operates ethically.
D) The firm's profit equals the sum of all payments to the 5 factors of production.

Question

Quizplus · Accepted Answer

Economists view profits as a cost paid to a factor of production (entrepreneurship), which is separate from the costs paid to the other four factors (land, labor, capital, and natural resources). Profits are also seen as a motivator for entrepreneurs to take on the risk and uncertainty of starting and running a business.

How Do Economists View Profits