Normal Profit Is

question 231

Multiple Choice

Normal profit is

• A)determined by subtracting implicit costs from total revenue.
• B)determined by subtracting explicit costs from total revenue.
• C)the return to the entrepreneur when economic profits are zero.
• D)the average profitability of an industry over the preceding 10 years.

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Interest Rate

The portion of a loan incurred as interest by the borrower, generally stated as an annual percentage of the loan yet to be repaid.

Payments

Transactions of money or its equivalent from one individual, business, or entity to another as a form of exchange or settlement.

Use Of Money

The concept referring to the opportunity cost of holding money without earning interest, or the benefits foregone by not investing or spending it.