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Economics 101: What Is The Difference Between Accounting Profit and Economic Profit? | SterlingTerrell.net

Economics 101: What Is The Difference Between Accounting Profit and Economic Profit?


What is the difference between accounting profit and economic profit?

Well, looking at things through the lens of economics, is a slightly different approach.

In this case it is simple.

Accounting profit does not account for implicit costs. (Opportunity cost can be part of this.)

Accounting profit only accounts for explicit costs.

Economic profit counts for both.