If a Firm Is Earning Zero Economic Profit, Then Its

question 92

Multiple Choice

If a firm is earning zero economic profit, then its accounting profit will:

• A)be negative.
• B)decrease in the long run.
• C)increase in the long run.
• D)be positive.

Understand the significance and use of tacit knowledge in the decision-making process.

Identify factors that contribute to escalation of commitment and ways to minimize it.

Describe the stages of the creative process and its role in decision making.

Recognize the impact of perceptual biases on information processing in decision making.

---

Definitions:

Consolidated Financial Statements

Financial statements that present the assets, liabilities, equity, income, expenses, and cash flows of a parent company and its subsidiaries as a single economic entity.

Voting Shares

Shares of a corporation's stock that grant the shareholder the right to vote on corporate matters, such as the election of the board of directors.

Consolidated Financial Statements

Financial statements that present the assets, liabilities, equity, income, and cash flows of a parent company and its subsidiaries as one single entity.

Voting Stock

Shares that give the holder the right to vote on company matters, such as electing the board of directors.