Question

Which of the following statements is true? Group of answer choices Economic profits include opportunity costs. Economic profits ignore opportunity costs. Accounting profits include all of the opportunity costs. Economists consider sunk costs in their decision making

Answer 1

The true statement among the given option is option a)Economic profit include opportunity costs.

Opportunity costs are revealed through implicit costs. Only explicit costs are included in accounting profit. However, economic profit includes both implicit and explicit costs. Opportunity cost is included on economic profit because economic profit includes implicit costs, and implicit costs display opportunity costs.

The key benefits of opportunity costs include: Awareness of Lost Opportunity: Opportunity costs make you think about the fact that, when choosing between possibilities, you lose up something in the one that is not chosen.

Therefore the correct option is a)Economic profits include opportunity costs.

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