Multiple Choice
Suppose Ben buys out Jerry's ownership in a firm but retains him as a salaried employee.Jerry gets a salary equal to the value of the share that he held in the firm.In this case,which of the following statements is true?
A) The firm's economic profit increases.
B) The firm's economic profit decreases.
C) There is no change in the economic profit of the firm.
D) There is no change in the accounting profit of the firm.
E) The firm's accounting profit increases.
Correct Answer:
Verified
Correct Answer:
Verified
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