The difference between accounting profit and economic profit relates to

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Quizplus · Accepted Answer

Accounting profit only takes into account explicit costs, such as wages and rent, while economic profit considers both explicit and implicit costs, including opportunity costs and the cost of capital. Therefore, economic profit is typically lower than accounting profit as it includes a more comprehensive view of the costs involved in running a business. The options A, B, and D are incorrect as they do not accurately explain the difference between accounting profit and economic profit.

The Difference Between Accounting Profit and Economic Profit Relates to