Gross Profit Is the Money That a Company Has Earned

question 104

True/False

Gross profit is the money that a company has earned after paying all its expenses.

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Definitions:

Long-Run Equilibrium

A state in which all factors of production and inputs in a market are fully adjusted to any economic changes, showing no tendency for further adjustment.

Competitive Price-Searcher Market

A market in which the firms have a downward-sloping demand curve, and entry into and exit from the market are relatively easy.

Positive Economic Profit

Earnings that exceed both the explicit and implicit costs of a company, indicating a financial gain beyond the normal expectations of profit.

Maximum Economic Profit

The highest possible financial gain obtainable by a firm when total revenue exceeds both explicit and implicit costs.