Which of the Following Is True of Economic Profit

question 147

Multiple Choice

Which of the following is true of economic profit?

• A)It equals total revenue minus total cost.
• B)It excludes implicit cost.
• C)It is any profit lower than a normal profit.
• D)Firms attempt to maximize accounting profit and are not concerned about economic profit.
• E)It is always equal to zero in a perfectly competitive market in the short run.

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Definitions:

Over-optimism

The tendency to be too confident or hopeful about future events or outcomes, often leading to underestimating risks.

Prospects

Potential customers or clients who have shown interest in a company's product or service.

Abilities

The inherent physical or mental capacities individuals possess, which can vary widely and impact performance in various tasks or occupations.

CEO

Chief Executive Officer, the highest-ranking individual in a company or organization, responsible for making major corporate decisions.