When economic profits are positive, accounting profits

Name: When economic profits are positive, accounting profits
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Question

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Positive economic profits mean that total revenue is greater than total costs, including opportunity costs. Accounting profits only take into account explicit costs, not opportunity costs, so they could be lower than economic profits. However, accounting profits cannot be negative if economic profits are positive, as explicit costs are always less than or equal to total costs.

When Economic Profits Are Positive, Accounting Profits