Asked by Christine Dawson on Apr 24, 2024
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Accounting profit differs from economic profit because:
A) of differences in the manner in which revenue is calculated.
B) economic costs include explicit costs,while accounting costs do not.
C) accounting costs are generally higher than economic costs because accounting costs include explicit and implicit costs,while economic costs include only explicit costs.
D) economic costs are generally higher than accounting costs because economic costs include all opportunity costs,while accounting costs include explicit costs only.
Economic Costs
The total cost of choosing one action over another, including both explicit costs (direct payments) and implicit costs (opportunity costs).
Accounting Costs
Explicit costs involving monetary payment or outlay by an organization or individual for goods or services.
Economic Profit
The difference between the total revenue generated by a business and the total costs, including both explicit and implicit costs.
- Learn how to calculate economic and accounting profits and distinguish between them.
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Learning Objectives
- Learn how to calculate economic and accounting profits and distinguish between them.
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