Economic profits are equal to

Question

Quizplus · Accepted Answer

Economic profits take into account both implicit and explicit costs, which include all inputs used in production. Therefore, the correct formula for economic profit is total revenue minus total costs. This includes the opportunity cost of all inputs, including labor, which is captured in the explicit and implicit costs. Option A only includes fixed costs, but economic profit takes into account all costs. Option B is only looking at profits after taxes, but it does not account for all costs. Option D mentions only labor and ignores other inputs, which is not accurate.

Economic Profits Are Equal to