Which of the following statements is correct?

a. Assuming that explicit costs are positive, accounting profit is equal to economic profit.

b. Assuming that explicit costs are positive, economic profit is greater than accounting profit.

c. Assuming that implicit costs are positive, economic profit is positive.

d. Assuming that implicit costs are positive, accounting profit is greater than economic profit.

Question

Chiquita

Business

31 May, 20:05

Which of the following statements is correct?

a. Assuming that explicit costs are positive, accounting profit is equal to economic profit.

b. Assuming that explicit costs are positive, economic profit is greater than accounting profit.

c. Assuming that implicit costs are positive, economic profit is positive.

d. Assuming that implicit costs are positive, accounting profit is greater than economic profit.

+1

Answers (1)

Know the Answer?

Titus Lindsey · Answer 1

The correct answer is d) Assuming that implicit costs are positive, accounting profit is greater than economic profit

Explanation:

The difference between the revenue received from the sale of an output and the opportunity cost of the inputs used.

Accounting Profit

The difference between a business's revenue and its accounting

expenses.

One of the differences that can be seen, is that the economic profit will always be lesser when compared to accounting profits. When compared to economic profit, the accounting profits are only given during leap years.