Question

when calculating the average rate of profit made by a company the correct mean ro use is the​

Answer 1

Answer:

Explicit costs (rent, labour costs, raw materials +)

Implicit costs (opportunity cost of capital/working elsewhere)

Answer 2

Answer:

average total cost

Step-by-step explanation:

Recall from previous lectures that firms use their average cost (AC) to determine profitability. Average cost in this example is average total cost (ATC). Profit for a firm is total revenue minus total cost (TC), and profit per unit is simply price minus average cost

Price > ATC Firm earns an economic profit

Price = ATC Firm earns zero economic profit

Price < ATC Firm earns a loss