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Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406

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BuyFindarrow_forward

Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406
Textbook Problem

If accounting profit is $400,000 greater than economic profit, what do implicit costs equal?

To determine

Impact on implicit cost if economic profit $400,000 which is greater than accounting profit.

Explanation

Accounting profit can be calculated by subtracting the explicit cost from total revenue.

Accounting profit=Total revenueExplicit cost        (1)

Economic profit can be calculated by subtracting both explicit costs and implicit costs from total revenue

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