Asked by
Nolan Killian
on Dec 05, 2024Verified
In making an "either-or" decision:
A) choose the activity that results in the greater economic profit.
B) choose the activity that results in the greater accounting profit.
C) continue in an activity as long as the marginal cost is greater than the marginal benefit.
D) continue in an activity as long as the marginal cost is less than the marginal benefit.
Economic Profit
The total revenue from operations minus both the explicit and implicit costs; it's a measure of profitability factoring opportunity costs.
Accounting Profit
The net income a company reports on its financial statements, calculated as total revenues minus explicit costs of doing business.
Marginal Cost
The additional cost incurred by producing one more unit of a good or service.
- Examine the processes behind making decisions in scenarios involving quantities and binary choices.
Verified Answer
AG
Learning Objectives
- Examine the processes behind making decisions in scenarios involving quantities and binary choices.