ENTREPRENEURIAL PLANNING
BUSINESS PLAN DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A business makes a profit when:
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Total revenue is greater than total costs
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Total revenue is less than total fixed costs
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Total revenue is greater than total variable costs
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Total revenue is less than total costs
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Explanation:
Detailed explanation-1: -Revenue, also known simply as “sales", does not deduct any costs or expenses associated with operating the business. Profit is the amount of income that remains after accounting for all expenses, debts, additional income streams, and operating costs.
Detailed explanation-2: -Normal profit occurs when economic profit is zero, or when the total revenue of a company equals the sum of implicit cost and explicit cost. It is the point where the business utilizes all the available resources efficiently, and the compensation is higher than the opportunity cost lost to produce the product.
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