How to Calculate Economic Profit: Definition & Formula

Instructions:

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question 1 of 3

Which of the following is the formula to calculate economic profit?

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1. Which is calculated in economic profit and NOT included while calculating accounting profit?

2. Which of the following regarding accounting and economic profits of a single business is true?

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About This Quiz & Worksheet

Calculating the economic profit of a business decision ahead of time can protect you from making a costly mistake. You should be familiar with the concept of economic profit as well as the factors involved in its calculation to do well on this quiz.

Quiz & Worksheet Goals

This quiz and worksheet set will look at:

  • The economic profit formula
  • Difference between accounting profit and economic profit
  • Definition of explicit costs

Skills Practiced

When taking this quiz, you will practice:

  • Problem solving - use your knowledge to solve a practice problem involving accounting profit, implicit costs and economic profit
  • Interpreting information - verify that you can read information regarding economic profit and interpret it correctly
  • Distinguishing differences - compare and contrast topics from the lesson, such as economic profit and accounting profit

Additional Learning

How to Calculate Economic Profit: Definition & Formula is the accompanying lesson that can help you:

  • Define economic profit
  • Calculate economic profit in real-life examples
  • Identify implicit costs
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