Question

Excess profit is earned when
O
(a) AR > AC
O (b) AR=AC
O (c) AR<AC
O d) AR is not equal to AC​

Answer 1

Answer:

b. AR>AC power adapter driver and passenger side of the

Answer 2

a) Excess profit is earned when AR>AC.

Explanation:

• AR means Average revenue means revenue earned on each unit and AC means average cost means the cost incurred on each unit.
• To earn excess profit the amount of revenue should be more than cost, only then the entrepreneur earns the excess profit.
• Because of this, we choose the first option because only in that the revenue is more than the incurring cost.
• Thus, option a) is correct in which average revenue is more than average cost.