When operating surplus will be equal …
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Meghna Thapar 5 years ago
A firm's net value added at FC is distributed as factor income in the form of rent, wages, interest and profit. Sum of rent, interest and profit (i.e., income from property and entrepreneurship) is called operating surplus.
Clearly, operating sulphus is zero :
(i) When loss to the firm is equal to sum of rent, interest and profit. In other words, income generated by the firm is just equal to compensation of employees
(ii) In general government enterprises and non-profit institutions serving households which do not earn income from property and entrepreneurship.
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