Question

10. A company can achieve a pure benefit or economic benefit only when: a) The marginal cost is equal to the marginal revenue b) The marginal cost is equal to the price. c) The average total cost is less than the average income. d) Net income is growing e) None of the above. 11. When the company is manufacturing and selling a volume of production such that the average total cost is equal to its average income, that company: a) Is obtaining a normal profit. b) You are incurring an economic loss. c) You are obtaining an economic or pure benefit. d) You are getting more than at the exact point of equality between income and expenses. e) You are getting less than at the point where the exact equality between income and expenses is given.

Answer 1

Answer 10:

Option C. A company can achieve a pure benefit or economic benefit only when the average total cost of the company is less than the average income of the company. This will lead to profits for the firm because total revenue of the firm will be more than total cost of the firm.

Answer 11:

Option E. When the company is manufacturing and selling a volume of production such that average total cost is equal to its average income, that company will be getting less than the point where the exact equality between income and expenses is given. This is because the company is equating average income and expenses rather than total income and expenses which will give a lower value.