Economic profit is defined as
A) price minus the sum of average fixed and marginal cost
B) total revenue minus total implicit cost
C) total revenue minus the average total cost
D) total revenue minus the sum of implicit and explicit costs
E) consumer surplus minus total explicit cost

Question

Quizplus · Accepted Answer

Economic profit is calculated by subtracting both implicit and explicit costs from total revenue. Implicit costs are the opportunity costs of using resources owned by the firm, while explicit costs are direct payments to others.

Economic Profit Is Defined as