AP®︎ Microeconomics: Topic 3.4 Flashcards

Total revenue minus explicit costs only.

Total revenue minus both explicit and implicit costs.

Zero economic profit, where total revenue equals explicit plus implicit costs.

A negative economic profit, occurring when total revenue is less than total economic cost.

Direct out-of-pocket business expenses such as wages, rent, and materials.

Opportunity costs of self-owned resources, including forgone wages, capital returns, and entrepreneurial time.

Economic profit encourages expansion, while economic loss encourages reducing output or exiting.

Positive economic profit earned in the long run.

A situation where economic profit equals zero because total revenue equals total economic cost.