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A business owner makes 50 items by hand in 40 hours. She could have earned $20 an hour working for someone else. Her total explicit costs are $200. If each item she makes sells for $15, her economic profit equals ____.
If you are entering a negative number be sure to include a negative sign (-) in front of that number.

Respuesta :

Answer:

- $250

Explanation:

The computation of the economic profit is shown below:

= Total revenues - explicit cost - implicit cost

where,

Total revenues = Explicit revenue × implicit revenue

                         = $15 × 50 items

                          = $750

Explicit cost = $200

Implicit cost = $20 × 40 hours = $800

Now put these values to the above formula

So, the value would be equal to

= $750 - $200 - $800

= - $250

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