Mini lessons / Microeconomics / 3.4
3.4 Accounting vs economic profit
Your friend says her food truck made a $60,000 profit. An economist might say she lost money. Who's right?
Step 1 of 4
Explicit and implicit costs
- Explicit costs: money actually paid out: wages, rent, ingredients.
- Implicit costs: the opportunity cost of the owner's own time and money, e.g. the salary she gave up to run the truck.