Suppose that a business incurred implicit costs of $500,000 and explicit costs of $5 million in a specific year.If the firm sold 100,000 units of its output at $50 per unit,its accounting:

Question

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The firm's total revenue was $5,000,000 and its explicit costs were also $5,000,000. This means that the firm had zero accounting profits. However, since the firm incurred implicit costs of $500,000, its economic losses were $500,000. Thus, the best answer is D, where the firm had zero accounting profits and economic losses of $500,000.

Suppose That a Business Incurred Implicit Costs of $500,000 and Explicit