Chapter 52, Problem 4MCQ

To determine

Economic profit

Explanation of Solution

While calculating economic profit, the implicit cost is considered because opportunity and explicit costs are deducted.

Therefore, the correct option is a.

Economics Concept Introduction

Introduction:

The costs which are already occurred but are not shown or visible as a cost or expense are implicit costs.

The costs which are used to determine the profitability of the company and consider as tangible expenses are explicit costs.