Asked by Denver Osborn on Jun 25, 2024

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If Pets.com is earning a rate of return less than necessary for the business to continue operations, then

A) total revenue exceeds economic costs.
B) economic costs exceed total revenue.
C) normal profit is zero.
D) economic profit is zero.

Economic Costs

The total expenses incurred in production, including both explicit costs like wages and implicit costs such as opportunity costs.

Total Revenue

Total Revenue refers to the total receipts from sales of goods or services.

Economic Profit

The profit a business makes after deducting both its explicit and implicit costs, including opportunity costs.

  • Distinguish between economic costs, total revenue, and profit in business operation contexts.
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KA
kenisha AllenJun 30, 2024
Final Answer :
B
Explanation :
Economic costs exceed total revenue when a business is earning a rate of return less than necessary to continue operations, indicating the business is not covering its total economic costs, which include both explicit and implicit costs.