Answer:
its accounting:_______
b. profits were $200,000 and its economic losses were $350,000.
Explanation:
a) Data and Calculations:
Units sold during the period = 100,000 units
Selling price per unit = $52
Revenue for the period = $5,200,000 ($52 * 100,000)
Explicit costs = 5,000,000
Accounting profits = $200,000
Less Implicit costs -550,000
Economic profits = ($350,000)
b) Accounting profits do not include implicit costs (opportunity costs). Economic profits, on the other hand, include both explicit and implicit costs. This makes economic profits to be broader and more inclusive than accounting profits.
