In: Economics
1A)
The difference between a firm's total revenues and total costs when all explicit and implicit costs are included is the firm's:
a. |
opportunity cost of capital. |
|
b. |
accounting profit. |
|
c. |
economic profit. |
|
d. |
long-run average total cost. |
1B)
The average fixed cost of a firm equal:
a. |
implicit costs divided by output. |
|
b. |
total cost minus variable cost. |
|
c. |
explicit costs divided by output. |
|
d. |
total cost minus total variable cost divided by output. |
Q1A)
Option c
Economic profit
An economic profit =total revenue -explicit costs-implicit
costs
so the difference is an economic profit.
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Q1B)
option d
total cost minus total variable cost divided by output.
Average fixed cost =fixed cost/quantity
fixed cost =total cost -total variable cost
so
AVC=(TC-TVC)/Q