Which of the following statements about economic profit are true? (Select all that apply)

Economic profit is the difference between total revenue and total costs, which includes both explicit costs (like wages and materials) and implicit costs (like the opportunity cost of using resources for one purpose instead of another). This means that economic profit takes into account what you could have earned if you chose a different option. For example, if you start a business and earn $50,000 but could have made $70,000 working at a job instead, your economic profit is actually negative because you are losing out on that $20,000 opportunity. Understanding this helps businesses and individuals make better decisions about where to invest their time and money. Therefore, statements about economic profit that highlight the importance of both explicit and implicit costs are true.