Which statement best explains the relationship between accounting profit and economic profit

Question

Quizplus · Accepted Answer

Economic profit takes into account both explicit and implicit costs, while accounting profit only considers explicit costs. Therefore, it is possible for economic profit to be zero while accounting profit is positive, as implicit costs have been taken into account. However, it is not possible for accounting profit to be zero while economic profit is positive, as economic profit accounts for all costs.

Which Statement Best Explains the Relationship Between Accounting Profit and Economic