1. Profits that are in excess of both implicit and explicit costs are called _____.
A) economic profits
B) accounting profits
C) accounting profits, normal profits, and economic profits
D) normal profits
2. For a competitive firm, if MR > AVC and MR > MC, then the firm should:
A) continue to produce at the same level of output.
B) shut down.
C) increase production.
D) reduce production.
These multiple choice questions belong to Economics. The 1st question is about profits in excess of both implicit and explicit costs and the 2nd question is about marginal revenue being greater than average variable cost and marginal revenue being greater than marginal cost.
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