Which of the Following Definitions Is Correct

question 97

Multiple Choice

Which of the following definitions is correct?

• A)Accounting profit + economic profit = normal profit.
• B)Economic profit − accounting profit = explicit costs.
• C)Economic profit = accounting profit − implicit costs.
• D)Economic profit − implicit costs = accounting profits.

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Definitions:

Fixed Expenses

These are expenses that remain constant regardless of the amount of goods produced or sold, including items like rent, wages, and insurance premiums.

Selling Price

The amount of money for which a product or service is sold to customers.

Variable Labor Cost

Costs for labor that change in proportion to the level of production or sales in a company.

Break-even Point

The point at which total costs and total revenue are equal, meaning there is no net loss or gain, and a business is not making a profit but not losing money either.