You Can Tell a Firm Is Operating in a Market

question 52

Multiple Choice

You can tell a firm is operating in a market that is in long-run competitive equilibrium if

• A) economic profits are positive.
• B) economic profits are negative.
• C) accounting profits are negative.
• D) accounting profits are zero.
• E) economic profits are zero.

---

Definitions:

Finance Lease

A lease agreement that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred.

AASB 16

An accounting standard issued by the Australian Accounting Standards Board specifying the principles for recognition, measurement, presentation, and disclosure of leases.

IFRS 16

The International Financial Reporting Standard issued by the IASB which specifies how an IFRS reporter will recognize, measure, present, and disclose leases.

AASB 16

An accounting standard issued by the Australian Accounting Standards Board that specifies the principles for the recognition, measurement, presentation, and disclosure of leases.