The following is cost information for the Creamy Crisp Donut Company: Entrepreneur's potential earnings as a salaried worker = $50,000 Annual lease on building = $22,000 Annual revenue from operations = $380,000 Payments to workers = $120,000

Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Refer to the data. If, other things equal, Creamy Crisp's revenue fell to $286,000:

A. its implicit costs, including a normal profit, would exceed its explicit costs.
B. it would earn a normal profit but not an economic profit.
C. it would suffer an economic loss.
D. its accounting profit would fall to zero.


Answer: B

Economics

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Economics