How do the concepts of accounting profit and economic profit differ Why is economic

Chapter 18, Problem 10

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How do the concepts of accounting profit and economic profit differ? Why is economic profit smaller than accounting profit? What are the three basic sources of economic profit? Classify each of the following according to those sources: LO18.6 a. A firms profit from developing and patenting a new medication that greatly reduces cholesterol and thus diminishes the likelihood of heart disease and stroke. b. A restaurants profit that results from the completion of a new highway past its door. c. The profit received by a firm due to an unanticipated change in consumer tastes.

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