Accounting profit is the difference between a firm's revenue and its opportunity costs.

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Accounting profit is the difference between a firm's revenue and its explicit costs (e.g. wages, rent, materials). It does not take into account the opportunity costs, which are the costs of the next best alternative foregone. Therefore, economic profit (which considers both explicit and implicit costs) is a better measure of a firm's performance.

Accounting Profit Is the Difference Between a Firm's Revenue and Its