The Difference Between the Revenue That a Company Brings in from Selling

question 31

Multiple Choice

The difference between the revenue that a company brings in from selling goods and services and the cost of generating this revenue is called _____.

• A) gross margin
• B) accounts receivable
• C) cost of goods sold
• D) profit

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Definitions:

Economic Profit

The variance between what a business earns in total and what it spends, counting both actual expenses and notional costs.

Efficient Output

The level of production where the maximum possible output is achieved with the given resources and technology, minimizing waste and cost.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services in exchange for money.

Firm's ATC

The total average cost for a firm, including both fixed and variable costs, per unit of output.