Consider the following information about a business Diane opened last year: price = $20, quantity sold = 25,000; implicit cost = $255,000; explicit cost = $360,000. Assuming that all relevant costs and revenue are noted, what was Diane's accounting profit?
A)$140,000
B)-$115,000
C)-$140,000
D)$115,000
E)$245,000

Question

Quizplus · Accepted Answer

Accounting profit is calculated as total revenue minus explicit costs. Total revenue is $20 * 25,000 = $500,000. Subtracting the explicit cost of $360,000 gives an accounting profit of $140,000.

Consider the Following Information About a Business Diane Opened Last