If a business has high accounting profits but low economic profits, what is the most likely underlying cause of this situation?

When a business shows high accounting profits but low economic profits, it usually means that the company is making a lot of money on paper but not as much when considering all costs. Accounting profit is simply the total revenue minus the explicit costs, like wages and materials. However, economic profit also takes into account implicit costs, which are the opportunity costs of using resources for the business instead of in the next best alternative. For example, if a business owner could earn $50,000 a year working elsewhere but chooses to run their own business, that lost salary is an implicit cost. So, even if the business shows a profit after covering its direct expenses, it might not be generating enough to cover the full costs, including what the owner could have earned elsewhere.