Suppose That an Industry's Profitability Is Zero or Negative Overall

question 31

Multiple Choice

Suppose that an industry's profitability is zero or negative overall,

• A)then all firms in the industry are performing badly.
• B)then no firm in the industry can be performing well.
• C)then the biggest firm in the industry is performing badly.
• D)then even so it's entirely possible that some firms are making very good profits.

---

Definitions:

Operating Loss

A situation where a company's operating expenses exceed its revenues, indicating it is not making a profit from its core activities.

Income Tax Rate

The fraction of earnings subject to taxation for either individuals or corporations.

Current Income Tax Liability

The amount of income tax that a company is obligated to pay to tax authorities within the current year.

Deferred Tax Asset

An accounting term that refers to a situation where a business has paid more taxes or estimates that it will pay more taxes than it will owe.