When evaluating a business's performance, it's important to distinguish between accounting profit and ______ profit, which includes both explicit and implicit costs.

When evaluating a business's performance, it's important to distinguish between accounting profit and economic profit. Accounting profit is the money a business makes after subtracting its explicit costs, like rent and salaries. On the other hand, economic profit takes into account both explicit costs and implicit costs, which are the opportunity costs of using resources in one way instead of another. For instance, if a business owner could have earned $50,000 working elsewhere but chose to run their own business, that $50,000 is an implicit cost. Understanding this difference helps business owners make better decisions by recognizing the true profitability of their operations.