On a Per-Unit Basis, Economic Profit Can Be Determined as the Difference

question 130

Multiple Choice

On a per-unit basis, economic profit can be determined as the difference between

• A) marginal revenue and product price.
• B) product price and average total cost.
• C) marginal revenue and marginal cost.
• D) average fixed cost and product price.

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Definitions:

Taxes

Compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Subsidies

Financial assistance provided by governments to individuals, businesses, or other entities, aimed at promoting economic activities that are deemed beneficial for the public interest.

Moral Hazard

A situation where one party engages in risky behavior knowing that it is protected against the consequences, typically because another party bears the cost of those actions.

Car-Insurance Coverage

Protection against financial loss resulting from incidents involving a vehicle, including accidents, theft, and other damages.