Profits are earned by entrepreurs who: A. All of the above are true. B. Have suc

Question

Profits are earned by entrepreurs who: A.   All of the above are true. B.   Have succeeded in putting a new invention or existing product/technology to practical commercial uses. C.   Have managed to produce a good/service that has no good substitutes (that is, the entreprenuer is a monopolist). D.   Have organized the factors of production (land, labor and capital) to successfully produce and sell a good/service. Which of the following is TRUE of profits? A.   An accountant would calculate profits in the same way as an economist would. B.   Only (a) and (d) are true. C.   Profits are equal to total revenue minus total cost. D.   A firm MUST earn positive ECONOMIC profits in order to stay in the business in the long run. E.   There is no guarantee that an entrepreneur or a business firm will make positive profits.

Explanation / Answer

1.C.     Have managed to produce a good/service that has no good substitutes (that is, the entreprenuer is a monopolist).

2 B.     Only (a) and (d) are true.

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