Why might Accounting Profit be at least as high as Economic Profit?
Great question. First off, when we’re talking about a firm, be careful with what you label economic (or opportunity) costs: they are the sum of implicit and explicit costs. Accounting and economic cost both consider explicit costs (things like wages, materials, and rent). Implicit costs are only included in economic costs — this extra category is why we expect economic cost to exceed accounting costs. So, could implicit costs hypothetically be zero, making accounting and opportunity costs equal?