A Grocery Store Sells a Bag of Potatoes at a Fixed

question 128

Multiple Choice

A grocery store sells a bag of potatoes at a fixed price of $2.30.Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes?

• A)marginal revenue
• B)gross earnings
• C)pure profit
• D)marginal costs
• E)net benefit

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Definitions:

NPV

Net Present Value, a method to assess the profitability of an investment by comparing the present value of cash inflows to the present value of cash outflows.

NPV

Net Present Value is a financial measure that determines the discrepancy between the present value of money coming in and going out over a certain timeframe.

PI

Stands for Profitability Index, which measures the ratio of payoff to investment of a proposed project.

Dividends

Earnings distributed by an enterprise to its proprietors, commonly resulting from the firm's profit margins.