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:

Solution

Option 3

Accounting profit = Revenue – Explicit Costs = 50000-40000 = $10000
Economic profit = Revenue – (Explicit Costs + Implicit costs) = 50000-50000 = $0