The Following Are Potential Owners of a Firm

question 96

Multiple Choice

The following are potential owners of a firm:

• A)managers, consumers, but not suppliers.
• B)suppliers, workers, but not consumers.
• C)workers, consumers, but not suppliers.
• D)suppliers, workers, and consumers.

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Definitions:

Economic Profit

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs.

Profit-Maximizing Output

The level of production at which a company achieves the highest possible profit, where marginal cost equals marginal revenue.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, engaged in commercial, industrial, or professional activities.

Profit

An excess of sales revenue relative to the opportunity cost of production. The cost component includes the opportunity cost of all resources, including those owned by the firm. Therefore, profit accrues only when the value of the good produced is greater than the value of the resources used for its production.