Question

Define economic profit and accounting profit in economics

Answer 1

Accounting profit is the monetary costs a firm pays out and the revenue a firm receives. ... Accounting profit = total monetary revenue- total costs. Economic profit is the monetary costs and opportunity costs a firm pays and the revenue a firm receives. Economic profit = total revenue – (explicit costs + implicit costs).

Answer 2

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Economic Profit. Accounting profit is a company's net earnings on its income statement, The profit or whereas economic profit is the value of cash flow that's generated above all other opportunity costs.

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