Question

Accountants and Economists differ in their calculations of profits in that; a. ​economists consider sunk costs b. ​accountants consider implicit costs only c. ​accountants consider explicit costs only d. ​all of the above

Answer 1

Answer:

The correct answer is letter "C": ​accountants consider explicit costs only.

Explanation:

Explicit costs are those necessary for the operations of the company such as wages, rent or raw materials. Implicit costs are the opportunity costs companies as a result of giving up factors such as purchases or qualified employee hires.

The accounting profit of a company is calculated by subtracting the explicit costs from the firm's total revenue. The economic profit is computed by subtracting the result of adding the explicit and implicit costs from the company's total revenue.