Consider the following information about a business Diane opened last year: price = $15, quantity sold = 25,000; implicit cost = $155,000; explicit cost = $260,000. What was Diane's economic profit? What was Diane’s accounting profit? Show your work!!

Economic profit = $-40,000

Accounting profit = $115,000

Explanation:

Accounting profit is total revenue less total cost or explicit cost.

Accounting profit = Total revenue - Total cost

Total revenue = 25,000 x $15 = $375,000

Total cost =  $260,000

Accounting profit = $375,000 -  $260,000 = $115,000

Economic profit is accounting profit less implicit cost or opportunity cost

Economic profit = Accounting profit -Implicit cost

= $115,000 - $155,000 = $-40,000

I hope my answer helps you

answer; niosh, the national institute for occupational safety and health;