When Calculating a Firm's Profit, an Economist Will Subtract Only

question 277

Multiple Choice

When calculating a firm's profit, an economist will subtract only

• A)explicit costs from total revenue because these are the only costs that can be measured explicitly.
• B)implicit costs from total revenue because these include both the costs that can be directly measured as well as the costs that can be indirectly measured.
• C)the opportunity costs from total revenue because these include both the implicit and explicit costs of the firm.
• D)the marginal cost because the cost of the next unit is the only relevant cost.