The definition of economic profit isA) total revenues less fixed costs.B) the difference between receipts from sales and cost of materials.C) what is left over after all opportunity costs have been met including interest forgone.D) gross profit less selling and operating expenses.

Question

Koundinya Jajam · Accepted Answer

Final Answer : C, Explanation :  Economic profit takes into account not only explicit costs (like wages and materials), but also implicit costs (such as opportunity costs like forgone interest). Therefore, the correct definition of economic profit is what is left over after all opportunity costs have been met including interest forgone.

The definition of economic profit is

A) total revenues less fixed costs.
B) the difference between receipts from sales and cost of materials.
C) what is left over after all opportunity costs have been met including interest forgone.
D) gross profit less selling and operating expenses.

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