BuyFind

Economics:

10th Edition
BOYES + 1 other
Publisher: Cengage Learning
ISBN: 9781285859460
BuyFind

Economics:

10th Edition
BOYES + 1 other
Publisher: Cengage Learning
ISBN: 9781285859460

Solutions

Chapter
Section
Chapter 23, Problem 4E
Textbook Problem

Can accounting profit be positive and economic profit negative? Can accounting profit be negative and economic profit positive? Explain.

Expert Solution
To determine

To explain:

Whether accounting profit be positive and economic profit be negativeand vice versa.

Explanation of Solution

Accounting profit is book-keeping profit which considers the monetary revenue and the cost, which is paid by the firm in the forms of wages to labor, raw material cost and rent to landowner (Explicit cost). Accounting profit does not consider those assets which are owned by an entrepreneur and for which no actual payment is made(implicit cost). This is because the accounting profit is greater than the economic profit.

Economic profit considers both explicit and implicit cost(also called as opportunity cost) and total monetary revenue...

Want to see this answer and more?

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

See solution

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions
Why must researchers document their sources meticuousIy?

Essentials of Business Communication (MindTap Course List)

What accounts and related adjustments are new in the work sheet of ToyJoy Manufacturing Co.?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

REQUIRED RATE OF RETURN Stock R has a beta of 1.5, Stock S has a beta of 0.75, the required return on an averag...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

How often must an employer file Form 941?

PAYROLL ACCT.,2019 ED.(LL)-TEXT

Does the current Social Security system promote income equality? Why or why not?

Microeconomics: Private and Public Choice (MindTap Course List)