Chapter 9, Problem 1P

To determine

To answer:

The questions based the situations given below

Concept Introduction:

Total revenue: The total revenue is defined as the total income made out by the firms from the sale of goods and services. The total revenue is calculated by multiplying the price of the commodity in the quantity of the commodity.

Economic profit: The economic profit a firm is calculated by deducting total revenue from total cost. The total costs consists of both implicit and explicit costs, explicit cost is the ordinary costs of the firm like rent, salaries to the employees etc… on the other hand implicit cost also known as imputed cost describes as the opportunity cost of anything.

Accounting profit: The accounting profit is calculated by deducting the explicit costs from the total revenue. The explicit cost is the ordinary costs of the firm like rent, salaries to the employees etc…