Suppose you run a small business in your building and you act also as a manager of your business. If you do not pay yourself a salary and rent of your building what effect will this practice have on the calculation of the firm’s accounting profit? Economic profit? Explain.

Q: Determine whether it is true or false The difference between economic profit and accounting profit…

A: According to given question In simple words economic profit is gradually referred to as in general…

Q: Distinguish among accounting profit, economic profit, and normal profit. Does accounting profit or…

A: The difference between the revenue earned from the sale of a product and the total cost of…

Q: The equilibrium rent on office space has just increased by $500/month. Compare the effects on…

A: The profit is the excess revenue made by the firm which can be calculated after deducting the cost…

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: What are the short-run and long-run costs of the production of Adidas?

A: Short run Cost is the cost price of manufacturing processes that have short-term inferences, i.e.,…

Q: Explain the difference between fixed costs, sunk costs and variable costs. Provide an example that…

A: The total cost refers to the market value of inputs used by the firm in the production of goods and…

Q: People often believe that large firms in an industry have cost advantages over small firms in the…

A: Individuals generally feel that big businesses have economic benefits in a sector over smaller…

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: How do the concepts of accounting profit and economic profit differ? Why is economic profit smaller…

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

Q: A company has the following output and total costs. It can sell each Calculate the average and…

A: marginal cost is the additional cost incurred in order to produce an additional unit of output.

Q: Define and explain the following terms associated with long run production Accounting profit…

A: The short-run is the time period where at least one factor of production is fixed and others are…

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: In the short run, if a marginal cost of a firm in a competitive industry is increasing while its…

A:

Q: What are some of the implicit cost incurred by an entrepreneur in running a firm? How are these…

A: The opportunity cost refers to the value of the next best alternative sacrificed when an individual…

Q: Assume John sells milk at AUD2.50 per litre. Also, assume John sells each pizza at AUD 10.00.…

A: Price of milk=AUD 2 50 per litrePrice of Pizza=AUD 10.00 Let the quantity of milk be X and pizza be…

Q: Suppose that a firm produces 100 units a month and sells them all for $5 each. The explict costs of…

A: "Explicit costs are direct expenses incurred by the business in the process of production of…

Q: Assume that although Marrow firm is presently making accounting profit it is experiencing negative…

A: A direct cost incurred for the firm to others in the process of running a business is referred to as…

Q: Frank is an engineer who had decided to leave his job making $150,000 per year to brew and sell…

A: Economics is the branch of knowledge in which we study scarce resources and unlimited wants. 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: The firm with total revenues of a 100 million explicit cost of 90 million and implicit cost of 20…

A: Accounting Profit is the difference between total revenue earned by firm and the explicit costs.…

Q: explain the following terms associated with long run production 3.1 Accounting profit 3.2 Economic…

A: 3.1Accounting profit:-This is a cash concept. It means that total revenue minus explicit costs—the…

Q: Can a firm earn an economic loss and an accounting profit at the same time?

A: The measure that depicts distribution of income to owner in a profitable process of production in…

Q: Imagine that you own your own business, or you are the manager of a company. Please provide concrete…

A: Fixed cost- It is not impacted by any change in the production or sale of goods.Variable cost- It…

Q: A producer borrows money and starts a business. He himself looks after the Identify implicit and…

A: Answering first question as per guidelines. Explicit Costs refer to actual payments made for…

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: The following table presents the price, cost and production of Samsung mobile company in 2018. In…

A: 1) Table: Using the following formulas: TC = VC+FCFC = TC-VCVC = TC-FCAC = TC/QAVC = VC/QAFC =…

Q: Which of the following is considered when calculating economic profit but not accounting profit? a.…

A: Cost refers to the amount or equivalent paid or charged for something

Q: explain what is meant by explicit; implicit; and sunk costs. How are they used to calculate…

A: All the costs that are linked or incurred to the business activities of a company and are easily…

Q: If a firm's marginal revenue is below its marginal cost, an increase in production will usually: a.…

A: Marginal cost (MC): - it is the additional cost incurred due to the production of additional units…

Q: What is the term for the rising portion of its marginal cost curve above its average variable cost…

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: 6 If a company’s total revenue is $1,744,322, their explicit costs are $863,214, and their…

A: "When firms produce commodities or services they get revenue from sales of their products but they…

Q: The blue line on the following graph shows a firm's daily costs for the first 90 days of the fiscal…

A: The area of shaded region will be equal to area of triangle OAB minus area of triangle OCD

Q: If a firm’s current revenues are less than its current variable costs, when should it shut down? If…

A: The firms have several things to look after, including the total costs, fixed costs, variable costs,…

Q: The cost and revenue functions for a company that manufactures x table saws are given. R(x) = 200x –…

A: By dividing total revenue(TR) by quantity(x) we will get the average revenue(AR) and by dividing…

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: Please explain the following i. Differentiate between Accounting Profit and Economic Profit ii.…

A: Profit is simply excess revenue over cost. Profit = Total revenue - total cost  It is primarily of…

Q: Suppose that a firm produces 475,000 units a year and sells them all for $20 each. The explicit…

A: All the firms try to maximize their profits. There are two types of profits- accounting profits and…

Q: Why is it reasonable to think of normal profit as a type of cost to the firm?

A: In the short run, firms usually try to temporarily shut down their operations when the prices are…

Q: Consider a small business that makes pastries. The business has rented a building to be used as its…

A: Consider a small business that makes pastries. The business has rented a building to be used as…