Which of the Following Statements Is Correct

question 42

Multiple Choice

Which of the following statements is correct?

• A)Assuming that explicit costs are positive, economic profit is greater than accounting profit.
• B)Assuming that implicit costs are positive, accounting profit is greater than economic profit.
• C)Assuming that explicit costs are positive, accounting profit is equal to economic profit.
• D)Assuming that implicit costs are positive, economic profit is positive.

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Definitions:

Selling Prices

The amount a customer pays to purchase a product or service from a seller.

Variable Costs

Expenses that vary with the amount of output or sales.

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent or salaries.

Break-Even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.