When Total Revenue Minus Total Economic Cost Is Equal to Zero

question 172

Multiple Choice

When total revenue minus total economic cost is equal to zero, the firm is

• A) earning above-average economic profit.
• B) earning the normal profit rate.
• C) losing too much money to stay in business.
• D) earning abnormally low profits.

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Definitions:

Manager-Managed

A management structure in which a company is overseen by professional managers rather than its owners or members.

Member-Managed

Refers to a type of management structure in an LLC where all members participate in the decision-making processes.

Limited Liability Company

An enterprise configuration that amalgamates the individual taxation approach of sole proprietorships or partnerships with the capped liability advantages of a corporation.

Corporation

A legal entity that is separate and distinct from its owners, offering them limited liability and the ability to raise funds by selling shares.