What Are Normal Profits

question 16

Multiple Choice

What are normal profits?

• A)The minimum profit that must be earned to keep the entrepreneur in that type of business.
• B)The explicit cost of doing business.
• C)Profits made by the typical firm in an industry.
• D)Total revenue over and above all costs.

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Definitions:

Large-Scale Production

Refers to the manufacturing of goods in large quantities using efficient methods and often specialized equipment, aiming for economies of scale.

Simple Structure

An organizational form characterized by low complexity, few layers of management, and a loose division of labor.

Professional Bureaucracy

An organizational structure characterized by highly specialized jobs and a strong reliance on trained professionals to make decisions.

Machine Bureaucracy

An organizational structure characterized by a high degree of formalization and centralized decision-making.