Accounting profits are typically

A) greater than economic profits because the former do not take explicit costs into account.
B) equal to economic profits because accounting costs include all opportunity costs.
C) smaller than economic profits because the former do not take implicit costs into account.
D) greater than economic profits because the former do not take implicit costs into account.

Economic Profits

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs.

Accounting Profits

The net income for a company after all expenses have been deducted from revenues, according to generally accepted accounting principles.

Implicit Costs

The opportunity costs of using resources owned by the company for its own operations, rather than earning income elsewhere.