Question

If your business earns​ $20,000 in​ revenues, has explicit costs of​ $7,000, and implicit costs of​ $5,000, your accounting profit is

Answer 1

Answer:

Accounting profit is $13,000.

Explanation:

Given information:

Total Revenues = $20,000

Explicit costs =​ $7,000

Implicit costs =​ $5,000

The formula for accounting profit is

Accounting profit = Total revenues - Explicit costs

Substitute the given values in the above formula.

Accounting profit =  $20,000 - $7,000

                             =  $13,000

Therefore, the accounting profit is $13,000.