Which of the following is a difference between accounting profit and economic profit?
a. Accounting profit includes only the implicit costs of a firm, while economic profit includes only the explicit costs of the firm.
b. Economic profit includes explicit and implicit costs of a firm, while accounting profit includes only explicit costs of the firm.
c. Accounting profit is calculated for the current year, while economic profit can be calculated only for previous years.
d. Accounting profit is the profit that has already been made by a firm while economic profit is the prediction of the firm's profit in future.
b
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Price leadership:
A) has rarely occurred in U.S. history. B) is always illegal in the United States. C) is usually the result of a dominant firm in the industry. D) usually results in the smaller firms in the industry incurring economic losses.
In Figure 8.10, airline Fly Smart is initially a secure monopoly between two cities X and Y at point M, serving 300 passengers per day at the profit-maximizing price of $300 per ticket. Suppose that Fly Smart discovers that a second airline is contemplating entering the market. If the minimum market entry quantity is 130 passengers per day, what price should Smart Fly charge to secure the entry-deterring quantity?
A. $300 B. $220 C. $180 D. $100