Multiple Choice Questions on When AR Rs 10 and AC Rs 8 the firm makes ........ for Commerce ( 11 and 12th) Preparation

Introductory Microeconomics

Title

45:30

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5 of 15 completed

38 of 100 completed

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Indian Economy - Understanding the basics of Indian economic system

When AR=Rs.10 and AC=Rs. 8, the firm makes?

Gross Profit

Normal Profit

Net Profit

Supernormal Profit

- AR (Average Revenue) of Rs. 10 and AC (Average Cost) of Rs. 8 means the firm earns Rs. 2 profit per unit.

- Gross Profit: Total revenue minus total costs without subtracting overheads or taxes.

- Normal Profit: Minimum profit needed for a firm to stay competitive; occurs when AR equals AC.

- Net Profit: Profit after subtracting all expenses, taxes, and costs from total revenue.

- Supernormal Profit: Also known as economic profit; achieved when AR exceeds AC significantly, indicating a profit above the normal level.

- Supernormal Profit: Under given conditions, AR exceeds AC, thus the firm makes a supernormal profit.