Economic profit is:

Question

Economic profit is:

Quizplus · Accepted Answer

Economic profit is the difference between the revenue earned and the total cost of production, which includes both operating costs and financial holding costs. Therefore, option B – Net operating profit minus financial holding costs – is the correct definition of economic profit. Option A is incorrect because gross margin only takes into account the cost of goods sold and does not include operating expenses. Option C is incorrect because opportunity costs are not the same as financial holding costs. Option D is incorrect because it subtracts gross margin from net operating profit, which does not account for financial holding costs.

Economic Profit Is