Answer the Question on the Basis of the Following Data

question 108

Multiple Choice

Answer the question on the basis of the following data confronting a firm: $\begin{array}{l}\begin{array}{ccr}&&\text { Marginal }\\\text { Output } & & \text { Reven } \\\hline0&&--\\1 & & \$ 16 \\2 & & 16 \\3 & & 16 \\4 & & 16 \\5 & & 16\end{array}\begin{array}{c}Marginal\\Cost\\\hline--\\\$ 10 \\9 \\13 \\17 \\21\end{array}\end{array}$ Refer to the data.Assuming total fixed costs equal to zero,the firm's:

• A) economic profit is $12.
• B) economic profit is $16.
• C) loss is $14.
• D) economic profit is $3.

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Definitions:

General Journal

A primary accounting record where all types of financial transactions are initially recorded in chronological order before being posted to specific accounts in the general ledger.

Cash Receipts Journal

A specific financial journal used in accounting to record all cash inflows to a business.

Sales Journal

A specialized accounting ledger that records all sales transactions of a business, typically for goods or services on credit.

Cash Receipts Journal

A specialized accounting journal used to keep track of all cash inflows or receipts of a business.