Question

Total revenue minus the total _____ and total _____ costs of production is economic profit. Multiple choice question. explicit; accounting explicit; modified implicit; explicit implicit; modified

Answer 1

Total revenue minus the total explicit and total implicit costs of production is economic profit.

Economic profit is accounting profit less implicit or opportunity costs. It is also total revenue less explicit and implicit cost.

Explicit cost is the amount used in running a business. Examples are rent and wages.

Implicit cost is the cost of the next best option that is let gone off when one option is chosen over other options. For example, a baker leaves his job to start his own business. His implicit cost is the wages he earned as a baker.

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