Question

Statement I: In economic theory,
normal profits form a part of
business firm's cost of production.
Statement II: An accountant
includes only explicit costs in cost
calculation.

A.both statements are true.

B.both statements are false.

C.statement I is true, statement II is false.

D.statement I is false, statement Il is true.​

Answer 1

Answer:

I THINK THE ANSWER MIGHT BE B. BOTH STATEMENTS ARE TRUE

Answer 2

Option A is the correct answer.

Both the statements i.e.

1. In economic theory, normal profits form a part of business firm's cost of production.
2. An accountant includes only explicit costs in cost calculation.

are true.

• Normal profits are included in total revenue in case of perfect competition such that when total revenue is equal to total cost then the firm is assumed to cover both cost as well as the margins to remain in the competition.
• Similarly only explicit costs are necessary to calculate firms profit. The implicit costs are used to make strategies for the company.