If total revenue covers explicit costs but not opportunity costs,then
A) both economic profit and accounting profit are positive.
B) economic profit is positive,but accounting profit is negative.
C) accounting profit is positive,but economic profit is negative.
D) neither accounting profit nor economic profit is positive.
E) accounting profit is negative,but economic profit may be positive or negative.

Question

Quizplus · Accepted Answer

Accounting profit only takes into account explicit costs, while economic profit considers both explicit and implicit costs (opportunity costs). Since total revenue covers only explicit costs, accounting profit will be positive but economic profit will be negative.

If Total Revenue Covers Explicit Costs but Not Opportunity Costs,then