Which of the following statements is INCORRECT?
A) A firm's total economic cost is at least as large as the firm's total accounting cost.
B) A firm's total economic cost includes both explicit cost and implicit cost of the firm.
C) A firm's implicit cost is the opportunity cost of non-purchased inputs.
D) A firm's total accounting cost is at least as large as the firm's implicit cost.

Question

Quizplus · Accepted Answer

Total accounting cost only includes the explicit costs of a firm's resources (such as wages, rent, and materials) and does not include any implicit costs (such as the opportunity cost of using the owner's time or resources). Therefore, it cannot be at least as large as the firm's implicit cost.

Which of the Following Statements Is INCORRECT