Scarlett recently began running her husband's lumber mill. Last month, the mill made a revenue of $5,000 and paid $3,400 in out-of-pocket costs. The lumber mill made an economic profit of $1,600 last month.

Question

Quizplus · Accepted Answer

The calculation only accounts for accounting profit, not economic profit, which also includes opportunity costs and other non-explicit costs.

Scarlett Recently Began Running Her Husband's Lumber Mill