It Is Not True of Economic Profits That They

question 14

Multiple Choice

It is not true of economic profits that they

• A)are a reward for bearing risks.
• B)are generally greater than accounting profits.
• C)are zero in a competitive market.
• D)are difficult to measure.

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Definitions:

Identical Good

A product that is uniform in quality and features across different producers, making it indistinguishable between sources.

Marginal Cost

The charges incurred for the production of an additional unit of a good or service.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved due to market inefficiencies.

Consumer Surplus

The difference in planned versus actual spending by consumers on a good or service.