Which of the following definitions is correct?
A)Accounting profit + economic profit = normal profit.
B)Economic profit − accounting profit = explicit costs.
C)Economic profit = accounting profit − implicit costs.
D)Economic profit − implicit costs = accounting profits.

Question

Quizplus · Accepted Answer

Economic profit is calculated by subtracting both explicit and implicit costs from total revenue, where accounting profit only subtracts explicit costs. Thus, to find economic profit from accounting profit, one must also subtract implicit costs.

Which of the Following Definitions Is Correct