Generally when calculating profits as total revenue minus total costs,accounting profits are larger than economic profits because economists take into account:
A) only explicit costs.
B) only implicit costs.
C) both explicit and implicit costs.
D) Both types of profits are always equal because they account for the same costs.

Question

Quizplus · Accepted Answer

Economic profits take into account both explicit (monetary) and implicit (opportunity) costs, while accounting profits only consider explicit costs. This means that economic profits are usually smaller than accounting profits because they subtract the full opportunity cost of all resources used in production.

Generally When Calculating Profits as Total Revenue Minus Total Costs,accounting