Answered: what is the distinction between…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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what is the distinction between economic and accounting profit

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Introduction

Profits refers to the income earned by the firm after accounting for all the expenses. These expenses are known as the costs of production which may be explic costs or implicit costs. Explicit costs are the cost of production which involves monetary transactions and are recording in the books. On the other hand, implicit costs do not involve any monetary transactions and are not recorded in the books.

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