Answer to Question #205670 in Microeconomics for Celia Coyi

Question

Accounting profit equals

Answer 1

Solution:

Accounting profit equals total revenues less explicit costs.

 

Total revenues refer to the total sales of goods and services generated by the company, which is calculated by multiplying the total amount of goods and services sold by their prices.

Explicit costs refer to all the expenses incurred as part of the normal business operations including direct payments, such as rent, wages, and depreciation.