Do zero economic profits mean zero accounting profits for a business? Why or Why not?

Question

Do zero economic profits mean zero accounting profits for a business? Why or Why not?

Answer 1

It might not be.  Economic profits= Revenue - explicit costs+implicit ones (opportunity costs).

Accounting profit= Revenue- explicit costs (no implicit costs involved).

So accounting profit being 0 does not mean that economic profits will be zero.  In fact, unless opportunity costs are zero (and accounting profits are zero) then there would be negative profit (negative because there would be extra costs from the opportunity/implicit costs).

Here to put it simply,

If Accounting profit is zero (hypotehtical example: Revenue is 18,000 and explicit costs are 18,000) (therefore acconting profit is zero (costs equal revenue)-

then in order for economic profit to be zero, there has to be no opportunity costs.

if however, there are opportunity costs then its < than zero, economic profit will be negative. GL ^^

Answer 2

These are potentially two different measures (actually more).

You need to define how you measure economic profit vs which accounting method you are applying (GAAP, IFRS, etc) and which accounting rules youa re applying within that accounting system.

Your question cannot be adequately answered until you ask a more defined question.