Total revenue minus the total implicit and total explicit costs of production is economic profit.
What are the key features of Accounting & Economic profits?
Production is the process of fusing inputs to create outputs, which should ideally be worth more than the inputs.
Revenue, which is calculated as price times quantity sold, is the income from selling a company's goods.
The total revenues less all explicit costs, including depreciation, is the accounting profit.
Total revenues less total costs, including both explicit and implicit costs, equals economic profit.
The main difference between Explicit & Implicit?
Explicit costs are expenses incurred directly by a company, such as payments for goods, rent, labour and salaries.
Implicit costs are a special kind of opportunity cost: they represent the cost of the company's existing resources that could have been used in another way.
An entrepreneur who runs a firm, for instance, could use her labor to pay the bills at a job.
Hence, the answer is explicit and implicit.
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