When Economic Profits in an Industry Are Zero and Implicit

question 36

Multiple Choice

When economic profits in an industry are zero and implicit costs are positive, _____.

• A)accounting profits will be greater than zero
• B)the firm will be running at a loss
• C)accounting profits will be negative
• D)the firm's revenue will not be enough to compensate for its losses, and it will to go out of business
• E)accounting profits will be equal to economic profits

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Definitions:

Vendor-managed Inventory

A supply chain strategy where the supplier assumes responsibility for managing inventory levels at the customer's premises.

Distribution Center

A warehouse or storage facility where products are stored and from which they are distributed to retailers or customers.

Stock

Shares representing ownership in a company or commodities or goods held in inventory by a business.

Just-in-time (JIT)

An inventory management strategy that arranges the receipt of resources and materials right at the moment they are needed, reducing storage costs.