Which of the following statements is (are) TRUE?
I. Accounting profit equals total revenue minus accounting cost.
II. Economic cost equals accounting cost minus opportunity cost.
III. Economic profit equals accounting profit plus opportunity cost.
IV. Economic profit equals total revenue minus economic cost.
A) I and IV
B) I, II, III, and IV
C) II and IV
D) I, III, and IV

Question

Quizplus · Accepted Answer

I. True, accounting profit is calculated by subtracting accounting costs (explicit costs) from total revenue.IV. True, economic profit takes into account both explicit and implicit costs (opportunity costs), thus it equals total revenue minus economic cost (accounting cost plus opportunity cost).

Which of the Following Statements Is (Are) TRUE