What Are Normal Profits

question 16

Multiple Choice

What are normal profits?

• A)The minimum profit that must be earned to keep the entrepreneur in that type of business.
• B)The explicit cost of doing business.
• C)Profits made by the typical firm in an industry.
• D)Total revenue over and above all costs.

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Definitions:

Beginning Total Assets

The total value of all assets owned by a company at the start of a financial period.

Ending Total Assets

Ending Total Assets refer to the total value of all assets owned by a company at the end of a financial reporting period.

Return on Total Assets

Return on total assets (ROTA) is a financial metric that measures a company's profitability in relation to its total assets, indicating how efficiently a company uses its assets to generate profit.

Controlling Influence

The power to direct the financial and operating policies of another entity so as to obtain benefits from its activities.