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AP Microeconomics 3.4: Types of Profit

Distinguish accounting, economic, and normal profit by including implicit opportunity costs, then calculate a firm’s profit or loss.

Syllabus
Effective Fall 2025
Course
AP Microeconomics

Covered syllabus points

CBA-2.C—a. Define the different types of profit. b. Explain how firms respond to profit opportunities. c. Calculate a firm’s profit or loss

3.4 Types of Profit question 1

[Maximum number: 1]

Anderson Company is a typical firm that manufactures Good G in a constant-cost, perfectly competitive market. Anderson Company is currently earning positive economic profit.

What must be true about the relationship between accounting profit and economic profit if Anderson Company currently incurs both explicit and implicit costs in production?

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