Accounting profit is equal to:

Question

Quizplus · Accepted Answer

Accounting profit is calculated by subtracting the explicit costs (such as wages, rent, materials) from total revenue. It does not factor in the opportunity cost or implicit costs, hence option B is incorrect. Option C describes the concept of marginal cost pricing, where the price of the last unit produced is set equal to its marginal cost. Option D is the profit maximizing rule in the short run, but not a definition of accounting profit.

Accounting Profit Is Equal To