Accounting profit:

Question

Accounting profit:

Quizplus · Accepted Answer

Accounting profit is the difference between total revenue and explicit costs, while economic profit is the difference between total revenue and both explicit and implicit costs. As accounting profit does not consider implicit costs, it tends to be larger than economic profit. Therefore, C is the correct option. A is incorrect because economic profit can be negative, meaning accounting profit exceeds economic profit. B and D are incorrect because accounting profit is not a better or equal measure of profitability compared to economic profit.

Accounting Profit