Final answer:
Total revenue minus only explicit costs is called accounting profit, which is the actual monetary difference between revenues and the explicit costs a business incurs.
Step-by-step explanation:
Total revenue minus only explicit costs is referred to as accounting profit. The term accounting profit is based on a cash concept, indicating the difference between the money a business receives from sales and the explicit, or out-of-pocket, costs it pays out. The key to distinguishing between accounting profit and economic profit lies in the inclusion of implicit costs. While accounting profit does not consider implicit costs, economic profit is the total revenue minus both explicit and implicit costs.
A company may have a positive accounting profit, yet have a negative economic profit if the implicit costs are large enough. For example, if a business has total revenues of $1,000,000 and explicit costs of $950,000, its accounting profit would be calculated as $1,000,000 - $950,000 = $50,000. However, if the business also has implicit costs of $30,000, the economic profit would be $50,000 - $30,000 = $20,000.