Accounting profits are:

Question

Quizplus · Accepted Answer

Accounting profits are calculated by subtracting total costs from total revenues, so the correct answer is A. Total revenue minus total cost gives a straightforward measure of profitability for a business. Option B is incorrect because accounting profits cannot be negative, and subtracting total revenue from total cost could result in a negative number. Option C is incorrect because it subtracts total costs from marginal revenue, which is not the correct calculation for accounting profits. Option D is incorrect because it subtracts marginal cost from total revenue, which is not the correct calculation for accounting profits.

Accounting Profits Are