If a Business Is Profitable from an Accountant's Point of View

question 96

Multiple Choice

If a business is profitable from an accountant's point of view, then:

• A)it is always profitable from an economist's point of view
• B)it is never profitable from an economist's point of view
• C)economic profit will be higher than accounting profit
• D)we cannot say without more information

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Definitions:

Price Ceiling

A legally established maximum price for a good, or service. Normally set at a price below the equilibrium price.

Sellers

Individuals or entities that offer goods or services for sale in the market, playing a key role in determining the supply conditions.

Surplus

When the quantity of a good or service supplied exceeds the quantity demanded at the current price.

Quantity Demanded

The overall volume of a good or service that consumers are ready and capable of purchasing at a particular price.