Answer to Question #112147 in Microeconomics for Eva

Question

A firm has normal profits of 12% on capital invested but this year makes an economic profit of 3%. What are the accounting profits?
A) (12/3)%; B) 12% - 3%; C) 12% + 3%; D) 3% - 12%; E) ((12+3)/2)%; F) (3/12)%

Answer 1

normal profits of 12%

this year profit=3%

the accounting profit =D) 3% - 12%

The firm is making losses .