Answered: Calculates the book profit or loss as…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter1: Introduction And Goals Of The Firm

Section: Chapter Questions

Problem 1.5CE

See similar textbooks

Related questions

Question

Calculates the book profit or loss as well as the economic gain or loss in each of the following situations:

A company with total revenue of $350,000, explicit costs of $395,000 and implied costs of $40,000

Expert Solution

Step 1

Book profit is also known as the accounting profit which represents the financial value of the company in the economy after the deduction of explicit cost like the cost of production, operations management etc.

Economic profit is the market value of the goods and services sold by the company or firm, it is the difference between the implicit cos that the company pays internally for the production process plus the explicit cost incurred from the total revenues earned by the firm in the market.

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions