If economic profit is negative but accounting profit is positive,then

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Quizplus · Accepted Answer

When economic profit is negative, it means that the total revenue generated by a business is not enough to cover both its explicit and implicit costs. However, accounting profit only considers explicit costs and ignores implicit costs. Therefore, if accounting profit is positive, it means that the revenue generated is enough to cover explicit costs, but not necessarily enough to cover implicit costs. Hence, accounting profit is less than the implicit costs, leading to negative economic profit.

If Economic Profit Is Negative but Accounting Profit Is Positive,then