Suppose that a business incurred implicit costs of $500,000 and explicit costs of $5 million in a specific year. If the firm sold 100,000 units of its output at $50 per unit, its accounting:
A. profits were $100,000 and its economic profits were zero.
B. losses were $500,000 and its economic losses were zero.
C. profits were $500,000 and its economic profits were $1 million.
D. profits were zero and its economic losses were $500,000.
Answer: D
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