UGC NET Economics || Economics
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Statement (I): Accounting profit is a surplus of total revenue over and above all paid-out costs, including both manufacturing and overhead expenses.
Statement (II): Economic or pure profit is a residual left after all contractual costs have been met, including the transfer costs of management, insurable risks, depreciation and payments to shareholders sufficient to maintain investment at its current level.
Statement (I): The ‘law of one price’ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.
Statement (II): An ‘Efficient market’ has no impediments to the free flow of goods and services, such as trade barriers.
Reason (R): If the revenue is less than its variable cost, the operation should be closed down.
In the context of the above two statements, which one of the following codes is correct?
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