How do the concepts of accounting profit and economic profit differ? Why is economic profit smaller than accounting profit? What are the three basic sources of economic profit? Classify each of the following according to those sources:a. A firm’s profit from developing and patenting a new medication that greatly reduces cholesterol and thus diminishes the likelihood of heart disease and stroke.b. A restaurant’s profit that results from the completion of a new highway past its door.c. The profit received by a firm due to an unanticipated change in consumer tastes.

Q: Distinguish between implicit and explicit costs and give examples of each. In addition, explain how…

A: Explicit Costs are those costs that are directly observed like the cost involved in hiring labor or…

Q: Briefly explain what is meant by: 1) account profit; 2) economic profit; and 3) zero economic…

A: 1. Accounting Profit: The accounting profit refers to the profit that comes after subtracting the…

Q: Distinguish between implicit and explicit costs. How is it possible to have positive accounting…

A: Any cost that has already occurred but is not shown or reported as a distinct item is referred to as…

Q: 1. What is profit? What is the difference between accounting profit and economic profit? 2. What is…

A: In a financial year, each firm /industry earns some revenue. Profit is the amount remaining from the…

Q: Danielle decides to withdraw her savings of $70,000 and invest in starting her own clothing…

A: Accounting profit is a company's net income, which is revenue minus expenses. Economic profit is…

Q: Explain the table  Output  (Units) Total Revenue (£) Total cost (£) Profit (£) Marginal…

A: Here, the giventBke shows the cost, revenue and profit information of a firm that helps to analyze…

Q: Microeconomic Chapter Eight Distinguish between a firm's explicit costs and its implicit costs and…

A: Answer: Explicit cost: It is the payment made to outsiders for hiring factor services. It involves…

Q: During the recent auto sales slump, GM, Ford, and Chrysler decided it was cheaper to sell cars to…

A: The article mentions anout selling cars at a loss. It is referring to economic cost.

Q: Your aunt is thinking about opening a hardware store.She estimates that it would cost $500,000 per…

A: opportunity cost is what is sacrificed when a person select one option over another one. it is a…

Q: What is the difference between Economic Profit and Accounting profit?

A: Explicit Cost is the cost paid to factors of production that are hired from outsiders. Implicit Cost…

Q: Explain the difference between accounting and economic profit. Give two examples of when they…

A: Accounting profit means that profit which is earned after the explicit costs are deducted from…

Q: How do firms measure their profit? by the sum of total sales revenue by the total value of…

A: Total revenue refers to price at which the firm is selling tha output multiplied by quantity of…

Q: Use your own example to clearly differentiate between an "accounting profit" and an "economic…

A: When talking about the difference between economic and accounting profit, it can be said that…

Q: Consider the concepts of accounting profit and economic profit.  Suppose you are a consultant and…

A: Profit is the surplus value that is generated in a process of production, which usually accrues to…

Q: 3. The following graph shows a department store's long-run average cost (LRAC) curve. The output per…

A: Since both are distinct questions, we will answer the first one (3) only. Please resubmit the other…

Q: 1) Looking back at the TFC (total fixed costs) what would the graph look like? (upward, downward,…

A: TFC is the total fixed cost which means all the cost which includes the fixed payments irrespective…

Q: With the help of an example explain the difference between accounting and economic profit. Building…

A: The term perfect t competition refers to a theoretical market structure. during a perfect…

Q: Question 5 The sole proprietor of the "Books and More" bookstore receives all accounting profits…

A: Here we calculate the economic profit by using the given details so the calculation of the following…

Q: Janet spends $20,000 per year on painting supplies and storage space. She recently received two job…

A: Given  Cost of supply of painting and storage space = $20,000 Janet sells 25 painting per year and…

Q: Kelly is a clerk and she earns $80,000 per annum. She thinks her salary is too low and decides to…

A: Accounting profit takes into consideration only out of pocket expense as the cost but the economic…

Q: Your aunt is thinking about opening a hardware store. She estimates that it would cost $500,000 per…

A: Accounting profit does not take into account the opportunity cost. Accounting Profit = Total Revenue…

Q: How does rising organic composition of capital threaten the rate of profit?

A: Historically, there have been a lot of economic theories stating the requirements for the…

Q: What is the LAW OF DIMINISHING RETURNS, and why is this law considered a short-run phenomenon?

A: The Law of Diminishing Return: It occurs when the employment of input with the other fixed input of…

Q: Ball Bearings, Inc., faces costs of production as follows:…

A: Cost of production refers to the overall cost incurred by a company to manufacture a given amount of…

Q: Your uncle is thinking about to open a fish & chips restaurant. He estimated that it would cost…

A: In economics, explicit cost is the direct cost of choosing an alternative and make expenditure on…

Q: The way in which accountants and economists analyse the costs of a firm differ. Discuss the…

A: Costs are the expenses being incurred for running a business. There are different types of costs…

Q: Explain briefly how you can be an entrepreneur and not merely a businessperson.

A: A businessperson deals with business activities and management. To be entrepreneur,businessperson…

Q: What is a cross-functional business process? Give one example of a cross-functional business…

A: Meaning of Cross-Functional Business Process: The term cross-functional business process refers to…

Q: Is this firm in a short-run or long-run horizon and how can you tell?

A: Factors of production are all the resources that are used in the production of the final output. For…

Q: What is the difference between economic profit and accounting profit?

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: Define and explain the differences between accounting profit and economic profit

A: Firms earn revenue with the help of the sale of the products that it produces. On the other hand, it…

Q: Complete the sentences to illustrate how economists and accountants view profit differently.…

A: We have to find following given questions.

Q: 4.4 Older oil wells that produce fewer than 10 barrels of oil a day are called “stripper" wells.…

A: * Answer :-

Q: 8. Which of the following are short-run decisions and which are long-run decisions? a. General…

A: Short run refers to the time period which does not allow changes in the capital to adjust with the…

Q: Economic profit is:

A: Economists and Accountants measure profit differently.

Q: What are the main causes of inefficiency in most firms? Should firms use accounting profits or…

A: Inefficiency: Inefficiency refers to the lack of innovation which results in the high cost of…

Q: How is it possible to have positive accounting profit and negative economic profit concurrently?

A: Answer: Let us first understand the difference between accounting profit and economic profit.…

Q: Answer the attached question

A: The economic profit is calculated by subtracting implicit costs and explicit costs from the total…

Q: Bonnie decides to open a company and earns JD50,000 in accounting profit the first year. When…

A: Implicit costs are those costs which are not visible or tangible but incurred in process of…

Q: The sole proprietor of the bookstore receives all accounting profits earned by her firm and a…

A: Economic profit refers to the additional profit after subtracting the opportunity cost from the…