Question

Which of the following definitions is correct? Multiple Choice Accounting profit + economic profit = normal profit. Economic profit = accounting profit − implicit costs. Economic profit − implicit costs = accounting profits. Economic profit − accounting profit = explicit costs.

Answer 1

Economic profit = Accounting profit - Implicit costs is correct

Explanation:

Economic profit includes income minus implied (opportunity) and explicit (currency) costs, while accounting profit includes benefit minus explicit cost.

The monetary risks a organization has are clear. The cost of competition of the capital of a organization are tacit costs.

The administrative expenses a corporation carries out and the income a business receives are the accounting benefit. This is the income from bookkeeping that comes beyond economic benefit.

Benefit accounting= net currency profit-total expenses.

Economic benefit is the expense of money and incentive of a business paying and the profits earned by an firm.

Company benefit= total income–(explicit cost + implicit cost).