Which of the following statements is incorrect?
A)A firmʹs total economic cost is at least as large as the firmʹs total accounting cost.
B)A firmʹs total economic cost includes both explicit cost and implicit cost of the firm.
C)A firmʹs implicit cost is the opportunity cost of non-purchased inputs.
D)A firmʹs total accounting cost is at least as large as the firmʹs implicit cost.

Question

Quizplus · Accepted Answer

A firm's total accounting cost only includes explicit costs, which are typically less than the total economic cost that includes both explicit and implicit costs. Therefore, the accounting cost is not necessarily larger than the implicit cost.

Which of the Following Statements Is Incorrect