Suppose that a business incurred implicit costs of $400,000 and explicit costs of $3 million in a specific year. If the firm sold 100,000 units of its output at $40 per unit, its accounting: A. losses were $600,000 and its economic losses were zero. B. profits were $600,000 and its economic profits

Suppose that a business incurred implicit costs of $400,000 and explicit costs of $3 million in a specific year. If the firm sold 100,000 units of its output at $40 per unit, its accounting: A. losses were $600,000 and its economic losses were zero. B. profits were $600,000 and its economic profits

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 7PA

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Question

Suppose that a business incurred implicit costs of
$400,000 and explicit costs of $3 million in a
specific year. If the firm sold 100,000 units of its
output at $40 per unit, its accounting:
A. losses were $600,000 and its economic losses
were zerO.
B. profits were $600,000 and its economic profits
were $1,000,000.
C. profits were $1,000,000 and its economic
profits were $600,000.
D. profits were $3,600,000O and its economic
profits were $600,000.

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