“The definition of cost is quite different for the economist than for an accountant”. Discuss with the help of an income statement calculating both accounting as well as economic profit. 

The cost is an important concept in both accounting and economics, but the way each discipline defines and calculates cost is quite different. In accounting, cost refers to the expenses incurred by a business in the production of goods or services, and it is usually measured using historical data. In contrast, economics defines cost as the value of the resources that are forgone in order to produce a good or service, and it takes into account both explicit and implicit costs.

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