1.During a year of operation, a firm collects $5,000,000 (TR) in revenue and spends $3,500,000 (EXPLICIT) on labor expense, raw materials, rent, and utilities. The firm’s owner has provided $1,000,000 of her own money instead of investing the money and earning a 12 percent annual rate of return. Show your work. a. The explicit costs of the firm are $_________. The implicit costs are $_________. Total economic cost is $__________. b. The firm earns accounting profit of $________.  The firm’s economic profit is $_________.

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Q: Distinguish between implicit and explicit costs and give examples of each. In addition, explain how…

A: Explicit Costs are those costs that are directly observed like the cost involved in hiring labor or…

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A: MC curve refers to the marginal cost curve.

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A: Explicit costs are clear, measurable expenses involving direct monetary transactions, such as rent…

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A: Total revenue is the total receipts collected from the sale of goods or service in the market.…

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Q: Question 12 Table: Variable Costs for Lawns Quantity of lawns Variable costs $0 10 100 20 300 30 500…

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Q: 14) Sophie Corporation recently produced and sold 107,000 units. Fixed costs at this level of…

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Q: Interest Table Cost.1.2: Amount Rates Loàn #1 = $28,000 2.40% %3D Loan #2 = $40,000 2.50% %3D…

A: The formula is: Accounting profit =total revenue - total explicit cost.

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Accounting and Economic Profit analysis

One comes across the concept of Profits in the context of business and in analyzing the results of business activity. Profits of a business can be accounting profits, and they can also be economic profits. So how does one understand the concept of accounting versus economic profits?