When Total Revenue Minus Total Cost Is Equal to Zero

question 40

Multiple Choice

When total revenue minus total cost is equal to zero, the firm is:

• A) earning above-average economic profit.
• B) earning a normal profit.
• C) losing too much money to stay in business.
• D) earning abnormally low profits.

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Definitions:

IRS

The Internal Revenue Service, a U.S. government agency responsible for the collection of taxes and enforcement of tax laws.

Economic Activities

Activities related to the creation, dispersal, and use of products and services in an economic system.

Personal Guarantee

This is a legal promise made by an individual to repay the borrowing of a business entity in case it fails to do so, thus personally ensuring the debt.

Economic Performance

Economic performance refers to the evaluation of how effectively an economy or a specific entity manages its resources and meets its objectives, often measured in terms of productivity, efficiency, and growth.