The Normal Rate of Return Is the

question 166

Multiple Choice

The normal rate of return is the

• A) average rate of return earned in an industry at a given point in time.
• B) opportunity cost of capital.
• C) return on capital associated with zero accounting profits.
• D) the amount paid to an investor when the firm is an on-going concern.

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Definitions:

Average Variable Cost (AVC)

The cost per unit produced that varies, found by dividing the total variable expenses by the amount of output generated.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one additional unit of a good or service changes as production increases.

Average Total Cost (ATC)

The total cost of production divided by the total quantity produced, representing the per unit cost.

Total Cost

The complete amount of money spent on producing or purchasing goods and services, including both fixed and variable costs.