Answer:
Economic profit = $-40,000
Accounting profit = $115,000
Explanation:
Accounting profit is total revenue less total cost or explicit cost.
Accounting profit = Total revenue - Total cost
Total revenue = 25,000 x $15 = $375,000
Total cost = $260,000
Accounting profit = $375,000 - $260,000 = $115,000
Economic profit is accounting profit less implicit cost or opportunity cost
Economic profit = Accounting profit -Implicit cost
= $115,000 - $155,000 = $-40,000
I hope my answer helps you
Answer:
Accounting Profit = $115.000 and Economic Profit= -40.000
Explanation:
Accounting profit is the monetary costs a firm pays out and the revenue a firm receives.
Accounting Profit = Total Revenues - Explicit Costs
Accounting Profit = ($15 x 25000) -$260,000=375.000-$260,000
Accounting Profit = $115.000
Economic profit is the difference between the total revenue received by a business and the total explicit and implicit costs for a firm.
Economic Profit = Accounting Profit - Implicit Cost
Economic Profit= $115.000 -$155,000
Economic Profit= -40.000
