​Which of the Following Statements Is True

question 39

Multiple Choice

​Which of the following statements is true?

• A)​Economic profits ignore implicit costs.
• B)Economic profits include implicit costs.
• C)Accounting profits include all of the opportunity costs.
• D)​Economists consider sunk costs in their decision making.

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Definitions:

Price Fixing

An illegal agreement between competitors to fix, control, or maintain the price of goods or services at a certain level, often higher than the free market would set.

Predatory Pricing

A competitive strategy where a company sets very low prices for its products or services with the intent to drive competitors out of the market.

Break-even Analysis

A calculation that determines when a business or project will be able to cover all its expenses and begin to make a profit.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain scale, such as rent, salaries, and insurance.