Economic profit:

Question

Economic profit:

Quizplus · Accepted Answer

Economic profit is calculated as total revenue minus total cost, including opportunity costs. Specifically, it is the vertical distance between total revenue and total cost at a particular level of output. Option A is incorrect - marginal revenue is the additional revenue received from selling one more unit of a good or service, and is not relevant to calculating economic profit. Option B is incorrect - the horizontal distance between total cost and total revenue denotes the break-even point. Option D is incorrect - although economic profit may be small or zero in perfectly competitive markets in the long run, it can still exist in the short run.

Economic Profit