Which of the Following Would Explain Why Accounting Profit Might

question 53

Multiple Choice

Which of the following would explain why accounting profit might be greater than economic profit?

• A)A firm has implicit costs as well as explicit costs.
• B)A firm has only explicit costs.
• C)A firm's net income is greater than its accounting profit.
• D)A firm's net income is less than its accounting profit.

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Definitions:

Objective Function

A mathematical expression representing the goal of an optimization problem, typically to maximize or minimize some quantity.

Constraint Equations

Mathematical expressions that specify the limitations or requirements that must be met in optimization and other mathematical problems.

Feasible Solutions

A set of solutions that meet all the constraints of a particular problem, available for consideration in decision-making processes.

Graphical Linear Programming

A method for solving linear programming problems by graphically finding the optimum point that maximizes or minimizes the objective function.