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In this case, where the revenue is not enough to cover the opportunity costs, the chosen option may not be the best course of action. [16] When economic profit is zero, all the explicit and implicit costs (opportunity costs) are covered by the total revenue and there is no incentive for reallocation of the resources.
Implicit costs also represent the divergence between economic profit (total revenues minus total costs, where total costs are the sum of implicit and explicit costs) and accounting profit (total revenues minus only explicit costs). Since economic profit includes these extra opportunity costs, it will always be less than or equal to accounting ...
Proper evaluation of explicit and implicit costs refers to weighing the benefits of the chosen option against all others. ... Opportunity cost is the potential benefits or gains an investor ...
It is different from accounting profit, which only relates to the explicit costs that appear on a firm's financial statements. An accountant measures the firm's accounting profit as the firm's total revenue minus only the firm's explicit costs. An economist includes all costs, both explicit and implicit costs, when analyzing a firm. Therefore ...
Opportunity cost is also often defined, more specifically, as the highest-value opportunity forgone. So let's say you could have become a brain surgeon, earning $250,000 per year, instead of a ...
Implicit bias could be subtle, like when a BIPOC student raises his or her hand in a classroom, yet the teacher routinely selects a White classmate to answer. Or it could be more overt, like being ...
Implementation shortfall is a commonly targeted benchmark, which is the sum of all explicit and implicit costs. Sometimes, an opportunity cost of not transacting is factored in. [5] After measurement, costs must be attributed to their underlying causes. Finally, this analysis is used to evaluate performance and monitor future transactions.
Unconscious bias or implicit bias The underlying attitudes and stereotypes that people unconsciously attribute to another person or group of people that affect how they understand and engage with them. Many researchers suggest that unconscious bias occurs automatically as the brain makes quick judgments based on past experiences and background ...