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When an entrepreneur invests his own financial capital in order to start a business

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When an entrepreneur invests his own financial capital in order to start a business

When an entrepreneur invests his own financial capital in order to start a business

• the firm's economic profits will exceed its accounting profits.

• the accounting costs increase because the funds would otherwise have to be borrowed.

• the opportunity cost of capital should be included in the economic cost of doing business.

• the investment is treated as a fixed cost, so it should not be considered as a cost of doing business.

Textbook

Economics Today: The Micro View

Edition: 19^th

Author: Miller

Read 181 times

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Izzy122 Author

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Smart ... Thanks!

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