Total Revenue Minus Total Explicit and Implicit Costs Defines

question 101

Multiple Choice

Total revenue minus total explicit and implicit costs defines:

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

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Definitions:

Sensitivity Analysis

The study of how the variation in the output of a model can be apportioned, qualitatively or quantitatively, to different sources of variation in the input of a model.

Fixed Costs

Expenses that do not change with the level of production or output over the short term, such as rent or salaries.

Variable Cost

Expenses that change in proportion to the amount of production or output levels.

Sensitivity Analysis

A technique used to determine how different values of an independent variable affect a particular dependent variable under a given set of assumptions.