Economic profit is defined as _____

Question

Quizplus · Accepted Answer

Economic profit takes into account the opportunity cost of resources used in production, which is the amount that must be paid to attract those resources from their best alternative use. Therefore, economic profit is calculated by subtracting the explicit and implicit costs from total revenue. Option A is incorrect as it only takes into account the explicit costs of production. Option B does not include the quantity of goods sold, which is necessary for calculating total revenue. Options D and E are incorrect as they do not subtract costs from total revenue.

Economic Profit Is Defined as _____