what is the difference between accounting cost and economic cost, SS4, reading 16

as title

wolwol, your books should explore this thoroughly. However, the short answer is that economic cost consists of both explicit costs (i.e. dollar cost) and implicit costs (i.e. opportunity cost), while financial accounting only recognizes explicit costs. So, armed with your newfound understanding of the difference, which do you expect to be higher for a company: its accounting profit or its economic profit?


3x. former. btw: accounting cost was not mentioned in reading 16, but it appeared in the review questions, i guess it will be discussed in later readings. like the marginal cost made its debut in reading 13, but was explained in detail in reading 17