If revenues are 50000 explicit costs are 40000 and implicit

If revenues are $50,000, explicit costs are $40,000 and implicit costs are $10,000, then accounting and economic profit are, respectively: O $0 and $10,000. O $0 and $40,000. $10,000 and $0. $10,000 and $40,000. None of the above are correct.

Solution

Ans

Accounting profit =revenue-explicit costs=50000-40000=10000

Economic profit=Revenue-(explicit+implicit costs) =50000-40000-10000=0

Note economists take into consideration implicit costs but accountants don\'t take them into consideration