The Minimum Rate of Return or Payment Necessary to Keep

question 141

Multiple Choice

The minimum rate of return or payment necessary to keep an entrepreneur in some specific enterprise is referred to as

• A) the pure rate of interest.
• B) the real interest rate.
• C) economic profit.
• D) normal profit.

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Definitions:

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor of production, holding other factors constant.

Total Revenues

The total amount of income generated by the sale of goods or services related to a company's primary operations.

Marginal Revenue Product

The additional revenue generated from using one more unit of a factor of production, holding all other factors constant.

Law of Diminishing Returns

This economic law states that after a certain point, successive increments of a single factor of production yield progressively smaller increases in output.