Total Revenue Minus Both Explicit and Implicit Costs Defines a Firm's

question 70

Multiple Choice

Total revenue minus both explicit and implicit costs defines a firm's:

• A)gross earnings.
• B)profit.
• C)marginal earnings.
• D)net worth.

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Definitions:

Indirect Material

Materials used in the production process but not directly traceable to a finished product, such as lubricants for machinery.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.

Safety Margin

The difference between the actual sales and the break-even point; it measures the amount by which sales can drop before a business incurs a loss.

Automated Firm

An enterprise that employs advanced technologies and systems such as artificial intelligence, robotics, and sophisticated software to minimize human intervention in its operations.