How do concepts of accounting profit and economic profit, Ask an Expert

Economics

How do concepts of accounting profit and economic profit differ? Why is economic profit smaller than accounting profit? What are the three basic sources of economic profit? Classify each of the following according to those sources:

a. A firm's profit from developing and patenting a new medication that greatly reduces cholesterol and thus diminishes the likelihood of heart disease and stroke.

b. A restaurant's profit that results from construction of a new highway past its door.

c. The profit received by a firm benefiting from an unanticipated change in consumer tastes.

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M937902

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Explain briefly but clearly the concepts of scarcity and

Explain briefly but clearly the concepts of scarcity and opportunity cost. Provide an example of opportunity cost from either your personal or professional experiences. Remember to include explicit costs (able to be meas ...

Question a newspaper headline reads state officials take on

Question: A newspaper headline reads: "State Officials Take on Pricing Regulations to Try to Provide Better, Dependable Income to Dairy Farmers." Is providing dependable income to dairy farmers a good policy goal for gov ...

Question suppose there are two consumers a and b the

Question: Suppose there are two consumers A and B. The marginal rate of substitution of A is MRS = Y /X , A A A and that of B is MRS = Y /X. Draw an Edgeworth Box and show all the points at which exchange B B B efficienc ...

Quesiton in 1980 automobile manufacturers in the united

Quesiton: In 1980, automobile manufacturers in the United States asserted that import quotas be instituted on foreign-produced vehicles marketed in the United States. In a critical essay, elaborate on the costs and benef ...

Question the investment tax credit was designed to increase

Question: The investment tax credit was designed to increase the ratio of capital spending to GDP and hence boost productivity growth. The credit was introduced in 1962, and although it was temporarily suspended in 1966 ...

Question suppose that the banking system in the united

Question: Suppose that the banking system in the United States could be described by the following set of equations: Reserve requirement ratio (rr) = 0.09 Currency in circulation (C) = $565 billion Total Deposits (D) = $ ...

Question the american bakers association reports that

Question: The American Baker's Association reports that annual sales of bakery goods last year rose 15 percent, driven by a 50 percent increase in the demand for bran muffins. Most of the increase was attributed to a rep ...

Question suppose that the demand for and the supply of a

Question: Suppose that the demand for and the supply of a product in a small open country are given by Q d = 60 - P and Qs = P - 20. The world price of the product is $36. (1) Compute the quantity of the product that the ...

Question in a certain county 27 of registered voters are

Question: In a certain county, 27% of registered voters are Republicans, 20% are Democrats, and the rest are Independents. 34% of Republicans oppose increased military spending, while 68% of the Democrats and 56% of the ...

Question assume that popcorn and potato chips are

Question: Assume that popcorn and potato chips are substitutes, and popcorn and cola are complements. a. How does a ceiling price (below equilibrium) on popcorn affect the price of cola? Explain. b. Start the problem ove ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Microeconomics Expert