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Economics glossary · Firms and competition

Accounting profit

What accounting profit means in economics, as one of the costs and profits an economist counts, with an example and a question to test yourself.

Definition
Accounting profit
Accounting profit is total revenue minus explicit costs only, the difference between the money brought in and the money paid out.
Example

Can you think of an example of accounting profit?

Test yourself

Can you name the two kinds of cost and the two kinds of profit an economist counts?

Learn it properly: the module

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