Identify the costs and revenues that economists include while calculating profit that accountants do not include.
Explanation of Solution
According to the trend, compared with the accountants, economists include all
Want to see more full solutions like this?
Chapter 11 Solutions
Microeconomics
- What is the difference between implicit and explicit costs? Why do economists include both implicit and explicit costs in their calculations of profit but accountants do not?arrow_forwardWhat is the difference between marginal product and marginal cost?arrow_forwardThe difference between economic profit and accounting profit is? Average cost Direct costs Economic costs Variable costs Marginal costsarrow_forward
- If the marginal cost is increasing does this tell you whether the average variable cost isincreasing or decreasing? Explain.arrow_forwardWhat is another term for marginal costsarrow_forwardUse the information in the graph to the right to find the values for the following at an output level of 45. 100- The marginal cost is $ 18 . (Round your response to the nearest dollar.) MC The total cost is $ (Round your response to the nearest dollar.) АТС AVC 43 30 18 45 Quantity of output .... Costarrow_forward
- Marty used to be a bartender making $5,000 a year but he quit in order to become a clown that does shows at birthday parties. His clown car and costumes cost $7,000 and he did a lot of shows in the past year, making $13,000 in revenue but paying $2,000 in variable costs for balloons, gas, etc. Marty asked an accountant and an economist to calculate his profit. What did they report?arrow_forwardWhat does average fixed cost fall with increase in output?arrow_forwardWhen thinking about cost analysis in Microeconomics, what are the real-world problems that occur when applying theories of scale? Describe and give an example of each.arrow_forward
- What is optimization? How does it blow up the myth about profit being a result of a mere increasedecrease interplay between cost and revenue? How much should a firm sell of a particular product in order to maximize profit? What factor does it have to consider in arriving at this decision?arrow_forwardDo AC and AVC intersects each other?arrow_forwarda software production firm, average product has started falling and total output indicated diminishing trend. The production manager Mr. Yahya called you and asked you to see the condition of marginal product. You analyzed the situation and reported that marginal product falling more than average product. Mr. Yahya got surprised. In your opinion which situation the firm is heading to?arrow_forward
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning