If Your Business Earns $10,000 in Revenues, Has Explicit Costs

question 104

Multiple Choice

If your business earns $10,000 in revenues, has explicit costs of $8,000, and implicit costs of $5,000, your economic profit is

• A) $2,000.
• B) -$3,000.
• C) $5,000.
• D) $3,000.

---

Definitions:

Elasticity of Demand

A measure of how the quantity demanded of a good or service changes in response to a change in its price.

Senior-Citizen Discounts

Reduced prices offered to elderly customers, typically those who have reached a specified age, as a benefit or marketing tool.

Cash Rebates

A refund or discount on the purchase price of a product or service, often used as a promotional tactic by retailers and manufacturers.

Software Upgrade

The process of replacing an existing software with a newer or better version to improve functionality or fix issues.