The correct answer is: A. a-3, b-1, c-4, d-2
- Economic profit is total revenue minus total cost, including both explicit and implicit costs.
- Accounting profit is total revenue minus explicit costs.
- Collusion/Cartel is an agreement between firms to restrict output and raise prices.
- Market is a place where buyers and sellers exchange goods and services.
Economic profit is the difference between a firm’s total revenue and its total cost. Total revenue is the total amount of money that a firm receives from selling its goods or services. Total cost is the total amount of money that a firm spends on producing its goods or services. Economic profit is important because it is a measure of a firm’s efficiency. A firm that is earning economic profit is more efficient than a firm that is not earning economic profit.
Accounting profit is the difference between a firm’s total revenue and its explicit costs. Explicit costs are the costs that a firm incurs when it pays for things like labor, materials, and rent. Accounting profit is important because it is a measure of a firm’s profitability. A firm that is earning accounting profit is more profitable than a firm that is not earning accounting profit.
Collusion/Cartel is an agreement between firms to restrict output and raise prices. Collusion is illegal in most countries, but it is still a common practice. Collusion can lead to higher prices for consumers and lower profits for firms.
Market is a place where buyers and sellers exchange goods and services. A market can be physical, such as a farmers’ market, or it can be virtual, such as an online marketplace. Markets are important because they allow buyers and sellers to find each other and to trade goods and services.