Businesses employ resources to use in the production and sale of a good or service.Accounting profit is typically used as a way of evaluating the success of a business, but economists argue that economic profit is more relevant to determining whether a business should continue to operate.What is the difference between these two measures of profit? Explain why accounting profit is usually greater than economic profit.

Question

Quizplus · Accepted Answer

The Answer of Businesses employ resources to use in the production and sale of a good or service.Accounting profit is typically used as a way of evaluating the success of a business, but economists argue that economic profit is more relevant to determining whether a business should continue to operate.What is the difference between these two measures of profit? Explain why accounting profit is usually greater than economic profit.

Businesses Employ Resources to Use in the Production and Sale