A certain firm manufactures and sells computer chips.Suppose that last year it sold 4 million chips at a price of $10 per chip.Which of the following terminology correctly accounts for the $40 million to this firm
A)Its accounting profit amounted to $40 million.
B)Its economic profit amounted to $40 million.
C)Its total revenue amounted to $40 million.
D)Its explicit costs amounted to $40 million.

Question

Quizplus · Accepted Answer

Total revenue is the amount of money a firm receives from selling its products or services. In this case, the firm sold 4 million chips at a price of $10 per chip, resulting in a total revenue of $40 million. Accounting profit is the total revenue minus explicit costs (such as wages, rent, and raw materials), while economic profit takes into account both explicit and implicit costs (such as the opportunity cost of the resources used to produce the chips). However, we do not have information about the firm's explicit or implicit costs, so we cannot determine its accounting or economic profit.

A Certain Firm Manufactures and Sells Computer Chips