If a firm has revenues of $200, explicit costs of $100, and implicit costs of $100, then its economic profit is:
A) $0.
B) $50.
C) $100.
D) $500.

Question

Quizplus · Accepted Answer

Economic profit is calculated as total revenue minus total explicit and implicit costs. In this case, the total revenue is $200, the explicit costs are $100, and the implicit costs are also $100. Therefore, the economic profit is $200 - $100 - $100 = $0. This means the firm is only making enough to cover its costs, without any excess profit.

If a Firm Has Revenues of $200, Explicit Costs of $100