If there are implicit costs of production

Economic profit is the difference between total revenue and total costs, including both explicit and implicit costs. Accounting profit is the difference between total revenue and explicit costs.

Implicit costs are the opportunity costs of using resources that could be used for other purposes. For example, if a business owner owns the building where their business is located, they are not paying rent to themselves. However, the opportunity cost of using that building for their business is the rent that they could have earned if they had rented it out to someone else.

Because implicit costs are not included in accounting profit, economic profit will always be less than accounting profit.

Here is a more detailed explanation of each option:

• Option A: Economic profit will be equal to accounting profit. This is not correct because economic profit includes implicit costs, while accounting profit does not.
• Option B: Economic profit will be less than accounting profit. This is correct because economic profit includes implicit costs, which are not included in accounting profit.
• Option C: Economic profits will be zero. This is not correct because economic profit can be positive or negative.
• Option D: Economic profit will be more than accounting profit. This is not correct because economic profit includes implicit costs, which are not included in accounting profit.