Economic profit
A) includes only explicit costs.
B) has no relationship to accounting profit.
C) serves to motivate entry to,or exit from,an industry.
D) is always greater than accounting profit.
E) equals accounting profit plus implicit costs.

Question

Quizplus · Accepted Answer

Economic profit takes into account both explicit (monetary) and implicit (opportunity) costs, and serves as a measure of the profitability of a business or industry. It can be used as a motivator for businesses to enter or exit an industry, depending on the level of economic profit being earned. It is not always greater than accounting profit, as the latter does not account for implicit costs.

Economic Profit