If Your Business Earns $10,000 in Revenues, Has Explicit Costs

question 91

Multiple Choice

If your business earns $10,000 in revenues, has explicit costs of $7,000, and implicit costs of $5,000, your accounting profit is

• A) $2,000.
• B) -$2,000.
• C) $5,000.
• D) $3,000.

---

Definitions:

Barrier To Entry

Factors that prevent or hinder companies from entering a particular market or industry.

Marginal Cost

The outlay for producing a supplementary unit of a product.

Average Cost

The total cost of production divided by the quantity produced, alternatively known as unit cost.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing and able to purchase at different prices.