Answer to Question #331904 in Economics of Enterprise for Christabel

Question

1.     A woman managing a duplicating (photocopying) establishment for $25,000 per year decides to open her own duplicating place. Her revenue during the first year of operation is $120,000, and her expenses are as follows:

Salaries to hired help                       $45,000

Supplies                                                15,000

Rent                                                     10,000

Utilities                                                1,000

Interest on bank loan                          10,000

Calculate (a) the explicit costs, (b) the implicit costs, (c) the business profit, (d) the    economic profit, and € the normal return on investment in this business.

Answer 1

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