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Economic Profit
The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing the additional value created by the firm.
Accounting Profit
Accounting profit is the financial gain calculated by subtracting total explicit costs from total revenue.
Explicit Costs
Direct, out-of-pocket payments for wages, rent, materials, and other inputs necessary for the production of goods or services.
Implicit Costs
The opportunity costs of using resources owned by the firm for its own use, without any direct payment made.
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