Suppose Bob leaves his $50,000-a-year job as a financial advisor to P.E.T.S. and starts his own business selling pet-care products. In the first year, his accounting profit is $70,000. Based on this level of success, Bob should:
a. return to his old job because his economic profit is negative.
b. return to his old job because his economic profit is smaller than his accounting profit.
c. return to his old job because his economic profit is less than his old salary.
d. stay with his new firm because his economic profit is positive.
e. stay with his new firm because accounting profit is positive.
Answer: d. stay with his new firm because his economic profit is positive.
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