Which of the following statements is correct? OA Accounting profit is typically larger than economic profit. OB. Accounting profit equals the firm's revenues minus all of its costs, implicit and explict OC. Economic profit equals the firm's revenues minus its explicit costs OD. All of the above

Which of the following statements is correct? OA Accounting profit is typically larger than economic profit. OB. Accounting profit equals the firm's revenues minus all of its costs, implicit and explict OC. Economic profit equals the firm's revenues minus its explicit costs OD. All of the above

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Firms In Competitive Markets

Section: Chapter Questions

Problem 4PA

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Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

Which of the following statements is correct?
OA. Accounting profit is typically larger than economic profit.
O B. Accounting profit equals the firm's revenues minus all of its costs, implicit and explicit
OC. Economic profit equals the firm's revenues minus its explicit costs.
OD. All of the above

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