The difference between accounting profit and economic profit relates to

Question

Quizplus · Accepted Answer

Accounting profit only takes into account explicit costs, such as rent and wages, while economic profit also considers implicit costs, such as the opportunity cost of using the owner's time and capital. Therefore, economic profit will always be lower than accounting profit, since it subtracts a larger cost from revenues. The other answer choices are not directly relevant to the difference between accounting and economic profit.

The Difference Between Accounting Profit and Economic Profit Relates to