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Patrick Lawrence
on Nov 25, 2024

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An industry is expected to expand if firms in the industry are earning positive

A) normal profits.
B) economic profits.
C) accounting profits.
D) total revenues.

Normal Profits

The level of profit that business owners consider satisfactory or "normal", essentially covering both explicit and implicit costs, including a normal rate of return on investment.

Accounting Profits

The total revenue of a business minus the explicit costs; it's the profit figure calculated according to generally accepted accounting principles.

Total Revenues

The overall income generated by a firm or economy from its business activities, including sales of goods and services, before any expenses are deducted.

  • Understand the conditions under which firms will enter or exit an industry based on economic profits.
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Evelyn FrecksDec 01, 2024
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