Why do economists measure profit differently from accountants?

1 answer:

8 0

Accountants only concern themselves with direct costs which involve things like the cost of materials, rent, and labor for instance. This profit is aptly named "accounting profit".

Economists consider those costs as well, but they also include indirect costs such as opportunity costs of other investments. Recall that opportunity cost is the cost of what you give up if you make a certain decision.

For instance, if a car factory makes 4 door sedans, but it could be making more money with SUVs, then the opportunity cost is high and the economic profit is lower compared to the accounting profit.

You might be interested in

Where on Earth's surface might you be experiencing the westerlies? Explain how air pressure, temperature, and the Coriolis effec

frutty [35]

The cold air from north western Canada add cooler air which follows through seattle and adds rain to the athmosphere and they blow to the west

4 0

3 years ago

Dual enrollment courses offer:

alexdok [17]

Answer is B

Hope that helped ^^

5 0

3 years ago

Read 2 more answers

Ella looked out her window and saw two birds. She immediately recognized one as a blue jay and the other as a robin. What is her

Oksi-84 [34.3K]

Answer:

Physical characteristics.

Explanation:

She knew what type of birds they were based on their physical characteristics.

She didn't see their nests, or see them eat, and she didn't test and analyze their genetics, so a is the correct option.

4 0

2 years ago

Americans are less likely to support the death penalty if they are A) white rathere than African American b) after September 11,

Ronch [10]

I believe the correct answer is c, if they believe innocent people have been put to death. Hope this helps!

8 0

2 years ago

The type of organism likely to suffer the most from the effects of biological magnification is

inysia [295]

Answer: a tertiary consumer (or higher level consumer); or, "apex predator".
__________________________
The higher up an organism is in the food chain (i.e, the higher the trophic level), the more likely the organism is likely to suffer the most from the effects of "biomagnification" (biological magnification; accumulation of toxins).

4 0

2 years ago