Refer to Scenario 7.1. Your economic profit last year was

A) -$40,000.
B) -$10,000.
C) $10,000.
D) $30,000.

Question

Refer to Scenario 7.1. Your economic profit last year wasA)  -$40,000.B)  -$10,000.C)  $10,000.D)  $30,000.

Shakhzod Lukmanov · Accepted Answer

Final Answer : B, Explanation :  Economic profit is calculated by subtracting both explicit (actual financial costs) and implicit costs (opportunity costs) from total revenue. Here, explicit costs are $60,000, and the implicit cost (the return the owner could have earned on the invested capital) is $40,000. Subtracting these costs ($100,000 in total) from the total revenue ($90,000) results in an economic profit of -$10,000.

Refer to Scenario 7.1. Your economic profit last year was

A) -$40,000.
B) -$10,000.
C) $10,000.
D) $30,000.

Definitions

Learning Objectives

Learning Objectives

Related questions