Question:
Implicit cost is equal to
Implicit cost is equal to
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Write economic profit as revenue minus explicit cost minus implicit cost, then compare with business profit.
Updated On: Jul 3, 2026
- Business profit minus economic profit
- Business profit plus economic profit
- Economic profit minus business profit
- Economic profit minus explicit cost.
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The Correct Option is A
Solution and Explanation
Step 1: Business (accounting) profit equals total revenue minus explicit cost only.
Step 2: Economic profit equals total revenue minus both explicit cost and implicit cost.
Step 3: Subtracting the second equation from the first gives business profit minus economic profit equals implicit cost.
Step 2: Economic profit equals total revenue minus both explicit cost and implicit cost.
Step 3: Subtracting the second equation from the first gives business profit minus economic profit equals implicit cost.
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