Which of the following is true if the opportunity cost of producing a particular good is less than its accounting profit?
A)Economic profit is zero.
B)Economic profit is negative.
C)Economic profit is positive.
D)Economic profit cannot be determined.

Question

Quizplus · Accepted Answer

Economic profit is positive when the opportunity cost of producing a good is less than its accounting profit, because economic profit takes into account both explicit (accounting) costs and implicit (opportunity) costs. If the opportunity cost is lower, it means the firm is effectively earning more than the costs (both explicit and implicit) it incurs, leading to positive economic profit.

Which of the Following Is True If the Opportunity Cost