A Payment for the Use of Any Resource Over and Above

question 275

Multiple Choice

A payment for the use of any resource over and above its opportunity cost is called

• A) accounting profit.
• B) economic profit.
• C) normal cost.
• D) economic rent.

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Definitions:

Profit-maximizing Level

The output level at which a firm maximizes its profits, determined by the point where marginal cost equals marginal revenue.

Total Revenue

The aggregate sum of funds a company acquires from selling products or offering services over a specified duration.

Inputs Prices

The cost or price of the raw materials, labor, and other resources that are used in the production process of goods or services.

Perfectly Competitive

A market structure characterized by a large number of small firms, homogenous products, perfect information, and no barriers to entry or exit, resulting in firms being price takers.