All else constant,as the amount of a firm's implicit costs increases,the difference between economic profit and accounting profit will:
A)increase.
B)stay the same.
C)decrease.
D)cannot be determined without more information.

Question

Quizplus · Accepted Answer

Implicit costs are not reflected in accounting profit but are included in economic profit. As the amount of a firm's implicit costs increases, economic profit will decline by a greater extent than accounting profit. Therefore, the difference between economic profit and accounting profit will increase.

All Else Constant,as the Amount of a Firm's Implicit Costs