Types of Profit
AP Microeconomics · Flashcards · Application
AP MICROECONOMICS · FLASHCARDS
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QUESTION
What is the formula for economic profit if implicit costs are zero?
QUESTION
Calculate economic profit: Total Revenue = $750, Explicit Costs = $500, Implicit Costs = $300.
QUESTION
What happens to economic profit if implicit costs exceed accounting profit?
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ANSWER
Economic Profit becomes negative. Opportunity costs exceed what the firm actually earns above explicit costs.
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