Gomez runs a small pottery firm. He hires one helper at $11,500 per year, pays annual rent of $7,000 for his shop, and spends per year on materials. He has $40.000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could e $6.500 per year if alternatively invested. He has been offered $22,000 per year to work as a potter for a competitor. He estim entrepreneurial talents are worth $4,500 per year. Total annual revenue from pottery sales is $80,000. Instructions: Enter your answers as whole numbers. a. Calculate the accounting profit for Gomez's pottery firm. b Now calculate Gomez's economic profit

Gomez runs a small pottery firm. He hires one helper at $11,500 per year, pays annual rent of $7,000 for his shop, and spends per year on materials. He has $40.000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could e $6.500 per year if alternatively invested. He has been offered $22,000 per year to work as a potter for a competitor. He estim entrepreneurial talents are worth $4,500 per year. Total annual revenue from pottery sales is $80,000. Instructions: Enter your answers as whole numbers. a. Calculate the accounting profit for Gomez's pottery firm. b Now calculate Gomez's economic profit

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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