What is economic profit equal to

Question

Quizplus · Accepted Answer

Economic profit takes into account both explicit costs (such as wages, rent, and materials) and implicit costs or opportunity costs (what you give up by choosing one option over another). In other words, economic profit is the revenue earned minus the total cost, including the opportunity cost of investments, time or other scarce resources used. Therefore, option B is the correct answer because it subtracts the opportunity cost from total revenue to determine economic profit.

What Is Economic Profit Equal to