Which of the following statements about the relationship between economic costs and accounting costs is true?
A)Accounting costs are always less than or equal to economic costs.
B)Accounting costs must always equal economic costs.
C)Accounting costs are always greater than economic costs.
D)Accounting costs are equal to or greater than economic costs.

Question

Quizplus · Accepted Answer

Accounting costs include explicit costs, such as wages and materials, but do not account for opportunity costs, which are included in economic costs. Therefore, economic costs, which consider both explicit and implicit (opportunity) costs, are always greater than or equal to accounting costs.

Which of the Following Statements About the Relationship Between Economic