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. Creamy Crisp:
A. has lower implicit costs, including a normal profit, than its explicit costs.
B. is earning a normal profit but not an economic profit.
C. is earning an economic profit.
D. is suffering an economic loss, when implicit costs are considered.
Answer: C
You might also like to view...
In a two-period model, holding everything else constant, an increase in current-period income
A) unambiguously increases the current account surplus. B) unambiguously decreases the current account surplus. C) has an uncertain effect on the current account surplus. D) has no effect on the current account surplus.
As the total quantity of land is fixed the payment for land is termed as economic rent
a. True b. False Indicate whether the statement is true or false
Recycling in the United States in recent years
A. has decreased in spite of increased rates for common recycling materials. B. has remained unchanged, and increased rates for recycling may help. C. has increased with increased rates for recycling materials. D. has increased with no help from increased fees for recycling materials.
Which of the following is true?
A. At the same price, demand is more elastic on the steeper demand curve. B. On a linear demand curve, the higher the price, the less elastic is demand. C. On a linear demand curve, elasticity is not constant. D. None are true.