Economic profit is the difference between

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Quizplus · Accepted Answer

Economic profit is calculated by subtracting not only the explicit costs (such as wages and rent) but also the opportunity cost of all the resources used in production (such as the cost of forgone alternatives and the value of the owner's time) from total revenue. This is what makes economic profit a more comprehensive measure of a firm's profitability compared to accounting profit, which only subtracts the explicit costs from total revenue.

Economic Profit Is the Difference Between