Direct Costs of Producing a Product or Providing a Service

question 66

Multiple Choice

Direct costs of producing a product or providing a service is called

• A) gross profit
• B) gross profit margin
• C) net profit
• D) net profit margin
• E) cost of goods sold

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Definitions:

Deadweight Loss

Refers to the loss of economic efficiency when the equilibrium for a good or service is not achieved, leading to a net welfare loss.

Price Floor

A governmental or regulatory minimum price set above the equilibrium price, preventing the market price from falling below a certain level.

Pounds

A unit of weight commonly used in the British imperial and United States customary systems, equal to 0.45359237 kilograms.

Kidney Transplants

A medical procedure wherein a healthy kidney is transplanted into a patient with kidney failure.