At the short-run break-even price, the firm A) may be earning a positive or negative profit depending upon costs. B) may be earning a positive or negative profit depending upon costs. C) is earning negative profits. D) is making a normal rate of return on its capital investment.

At the short-run break-even price, the firm A) may be earning a positive or negative profit depending upon costs. B) may be earning a positive or negative profit depending upon costs. C) is earning negative profits. D) is making a normal rate of return on its capital investment.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 4SQP

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Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

At the short-run break-even price, the firm

A) may be earning a positive or negative profit depending upon costs.

B) may be earning a positive or negative profit depending upon costs.

C) is earning negative profits.

D) is making a normal rate of return on its capital investment.

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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