Difference Between Accounting & Economic Profit
Not what you're looking for?
1. What is the law of diminishing returns? Can you give an example of when diminishing returns have set in (could set in) at a work place?
2. What is the difference between economic profits and accounting profits? Can you give examples of costs (opportunity or explicit) you think your firm overlooks/might overlook when it calculates its costs and profits?
Purchase this Solution
Solution Summary
This solution answers two questions: 1. What is the law of diminishing returns? 2. What is the difference between accounting profit and economic profit? Both answers are illustrated with examples.
Solution Preview
1. The Law of Diminishing Returns states that as more units of one input are added, with other inputs held constant, the Marginal Product (the additional output from each added input) will eventually decrease. A simple example is the effect of adding additional workers to a production process. Adding a few workers might increase ...
Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.