Since, Over the Long Run, There Would Be No Output

question 26

True/False

Since, over the long run, there would be no output produced if a firm's owners did not receive at least a normal return on investment, normal profit is considered to be a cost of production.

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Definitions:

Support Department Allocation Rates

Ratios or percentages used to distribute the costs of support departments to producing or service departments based on agreed-upon methods.

Operating Income

The amount of profit realized from a business's operations after deducting operating expenses such as wages, depreciation, and cost of goods sold.

Invested Assets

Resources such as securities and properties that an individual or organization allocates money into with the expectation of generating income or profit.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment relative to its cost.