If implicit costs equal accounting profit, economic profit must be
A)negative.
B)positive.
C)zero.
D)higher in the short run than in the long run.
E)higher in the long run than in the short run.

Question

Quizplus · Accepted Answer

Economic profit is calculated by subtracting both explicit (accounting costs) and implicit costs from total revenue. If implicit costs equal accounting profit, it means all potential earnings (including alternative costs) are exactly used up, leaving economic profit at zero.

If Implicit Costs Equal Accounting Profit, Economic Profit Must Be