Price=$20, Quantity=400units, Unit cost=$15, implicit cost=$4,000
Please explain your answer.
The "economic profit" is a way of incorporating opportunity cost into your decision making. So in your example; "implicit costs" would imply that the subject had sacrificed an opportunity that amounted to a numerical addition of $4,000 of profit he had shot down in favor of the current course of action; or what we see here as the "Accounting profit"
So although you can calculate the accounting profit as:
"AccountingProfit=(Total Revenue-Total Expenses)" -->
($8000-$6000)--> $2000;
That number is misleading because his economic profit; or including the $4,000 opportunity lost would change the economic profit to
EconomicProfit=(AccountingProfit-Opportunity Cost)--> ($2000-$4000)--> -2.000
