Multiple choice

If average revenue is more than average cost, the firm is

  1. earning normal profits

  2. earning super normal profits

  3. incurring maximum losses

  4. incurring minimum losses

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

If AR is more than AC, there exist super normal profits.    If AR is equal to AC, then there are normal profits and if it is less than AC, then there are losses.