Use the following scenario to answer the following questions:
Carmela's Churros is a perfectly competitive firm that sells desserts in Houston,Texas.Carmela's Churros currently is taking in $40,000 in revenues,and has $15,000 in explicit costs and $25,000 in implicit costs.
-Carmela's Churros' accounting profits are
A) $40,000.
B) $15,000.
C) $25,000.
D) $0.
E) $80,000.

Question

Quizplus · Accepted Answer

Accounting profits are calculated by subtracting explicit costs from total revenues. Therefore, Carmela's Churros' accounting profits are $40,000 (revenues) - $15,000 (explicit costs) = $25,000.

Use the Following Scenario to Answer the Following Questions