If the Accounting Profit for a Firm Is Negative,the

question 125

Multiple Choice

If the accounting profit for a firm is negative,the:

• A)economic profit must be positive.
• B)economic profit must be negative.
• C)firm should produce more.
• D)firm will not owe any taxes.

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Definitions:

Average Variable Costs

The total variable costs (costs that change with production volume) divided by the total output.

Repairs

The process of fixing or restoring something that is broken or damaged to bring it back to a good condition.

Hydraulic Car Smasher

A machine used in scrapyards to crush cars into small, compact pieces using hydraulic power.

Dispose of Cars

The process of discarding or recycling vehicles that are no longer functional or needed.