If a firm is earning negative accounting profits,it implies

Question

​If a firm is earning negative accounting profits,it implies

Quizplus · Accepted Answer

Negative accounting profits indicate that the firm's expenses are exceeding its revenues, but it does not provide a complete picture of the firm's economic profits. Economic profits take into account not just explicit costs (as captured in accounting profits) but also implicit costs such as opportunity costs. Therefore, accounting profits alone cannot determine economic profits.

​If a Firm Is Earning Negative Accounting Profits,it Implies

If a Firm Is Earning Negative Accounting Profits,it Implies