BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -What is the difference between a producer surplus and profit? Profit is total revenues minus total costs. Conversely, producer surplus is the revenue from the sale of one item minus the marginal, direct cost of producing that item-i.e., the increase in total cost caused by that item.

Detailed explanation-2: -Alternatively stated, economic profits are accounting profits minus implicit costs. Thus, the difference between economic profits and accounting profits is that economic profits include the firm’s implicit costs and accounting profits do not. A firm is said to make normal profits when its economic profits are zero.

Detailed explanation-3: -Economic profit = revenues-explicit costs-opportunity costs. If you excluded the opportunity costs from this equation, you’d get simply the accounting profit. However, when you subtract the opportunity costs as well, the economic profit results.

Detailed explanation-4: -A surplus describes the amount of an asset or resource that exceeds the portion that’s actively utilized. A surplus can refer to a host of different items, including income, profits, capital, and goods.