Which of the Following Is True of Profits and Losses

question 51

Multiple Choice

Which of the following is true of profits and losses?

• A) Profits direct entrepreneurs toward production of goods that are highly valued relative to their cost, while losses direct them away from wealth-reducing activities.
• B) Profits indicate that the firm is charging prices that are too high, while losses indicate that the firm needs to raise its prices.
• C) Profits indicate that the consumer is getting a bad deal, while losses indicate that the consumer values the product highly relative to its cost.
• D) Profits indicate that the suppliers of resources are underpaid, while losses indicate they are overpaid.

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