[amp_mcq option1=”Economic profit will be equal to accounting profit” option2=”Economic profit will be less than accounting profit” option3=”Economic profits will be zero” option4=”Economic profit will be more than accounting profit.” correct=”option2″]<\/p>\n
The correct answer is: B. Economic profit will be less than accounting profit.<\/p>\n
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.<\/p>\n
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.<\/p>\n
Because implicit costs are not included in accounting profit, economic profit will always be less than accounting profit.<\/p>\n
Here is a more detailed explanation of each option:<\/p>\n
[amp_mcq option1=”Economic profit will be equal to accounting profit” option2=”Economic profit will be less than accounting profit” option3=”Economic profits will be zero” option4=”Economic profit will be more than accounting profit.” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-58662","post","type-post","status-publish","format-standard","hentry","category-economics","no-featured-image-padding"],"yoast_head":"\n