If the ABC Typing Service is earning a rate of return greater than the return necessary for the business to continue operations, then ?
Correct answer: D. the firm is earning are economic profit
- A. normal profit is zero
- B. total costs exceed total revenue
- C. total costs exceed normal profit
- D. the firm is earning are economic profit
Explanation
A return above the minimum needed to keep the business operating includes economic profit, which is revenue remaining after both explicit costs and implicit opportunity costs. Thus the firm is earning economic profit.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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