If your business earns $10,000 in revenues, has explicit costs of $7,000, and implicit costs of $5,000, your economic profit is

Question

Quizplus · Accepted Answer

Economic profit is total revenue minus total explicit and implicit costs. 
Total revenue = $10,000
Total explicit costs = $7,000
Total implicit costs = $5,000
Economic profit = $10,000 - ($7,000 + $5,000) = -$2,000. 
Therefore, the best choice is B because the economic profit is negative indicating that the business is making a loss after accounting for all costs, both explicit and implicit.

If Your Business Earns $10,000 in Revenues, Has Explicit Costs