If you were told that a firm earns positive accounting profit and nothing else, what would you know is true about its economic profit?

Question

Quizplus · Accepted Answer

Economic profit takes into account both explicit costs (such as accounting costs) and implicit costs (such as opportunity costs). Without knowing the firm's implicit costs, we cannot determine its economic profit, even if it earns positive accounting profit. So option B is the correct answer.

If You Were Told That a Firm Earns Positive Accounting