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1) Explain why economic profit provides a better measure of profit than accounting profit. 2) Explain what occurs when a new technology makes another…

1) Explain why economic profit provides a better measure of profit than accounting profit. 2) Explain what occurs when a new technology makes another…

1) Explain why economic profit provides a bettermeasure of profit than accounting profit.2) Explain what occurs when a new technology makesanother one obsolete in terms of economic profit.Consider firm A to be an existing firm using the oldtechnology. Firm B is the new firm with the newtechnology. Firm A earned positive profits foryears, but with the entrance of Firm B, Firm A’sgoods and services are no longer desired.3) It is often stated that free cash flow is the same aseconomic profit. Define free cash flow.Demonstrate whether it is or is not the same aseconomic profit.

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