The Difference Between the Earnings That a Firm Receives from Selling

question 2

Multiple Choice

The difference between the earnings that a firm receives from selling its good or service and the costs of production for the good or service is the

• A)marginal benefit
• B)opportunity cost
• C)utility
• D)profit

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Definitions:

Securities

Financial instruments that represent ownership positions in corporations, creditor relationships with corporations or governmental bodies, or rights to ownership as represented by an option.

Capital Structure

Refers to the way a company finances its assets through a combination of debt, equity, and other securities.

Debt

An amount of money borrowed by one party from another, often used by businesses and governments to finance operations and projects.

Equity

The worth of a stake in property ownership, such as the equity held by shareholders in a company.