Suppose That a Business Incurred Implicit Costs of $200,000 and Explicit

question 135

Multiple Choice

Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a specific year.If the firm sold 4,000 units of its output at $300 per unit,its accounting profits were:

• A) $100,000 and its economic profits were zero.
• B) $200,000 and its economic profits were zero.
• C) $100,000 and its economic profits were $100,000.
• D) zero and its economic loss was $200,000.

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Definitions:

Utility Theory

A theory in economics that attempts to describe how individuals make choices based on the perceived satisfaction or utility from outcomes.

Framing of the Announcement

The way in which an announcement is presented or communicated, which can influence the perception and reaction of the audience.

Decision Making

The cognitive process of selecting a course of action from among multiple alternatives.

Satisficing

A decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution, especially when faced with complex situations.