1.1.3 Accounting Profit vs Economic Profit

Question 1

Accounting Profit

Answer 1

revenue minus explicit costs

Question 2

Explicit Costs

Answer 2

Costs in which an actual payment is made

Question 3

Economic Profit

Answer 3

revenue minus explicit costs and implicit costs

Question 4

Implicit Costs

Answer 4

Costs in which no actual payment is made, they are the opportunity costs of resources