Question

Consider the following information about a business Dina opened last year: price = $10, quantity sold = 25,000; implicit cost = $155,000; explicit cost = $260,000. What was Dina's economic profit?

Answer 1

Economic profit =total revenue - explicit cost - Implicit cost

$=250000-260000-155000 \\ =-165000$

$Total \;revenue =Price \times quantity$

$=10\times25000 \\ =250000$