View previous attemptGomez runs a small pottery firm. He hires one helper at $14,500 per year, pays annual rent of $7,500 for his shop, and spends $18,000per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him$5,000 per year if alternatively invested. He has been offered $23,000 per year to work as a potter for a competitor. He estimates hecould use his talents to earn an additional $6,000 per year in consulting fees if he were working full time as a potter. Total annualrevenue from pottery sales is $86,000.Instructions: Enter your answers as whole numbers.a. Calculate the accounting profit for Gomez's pottery firm.b. Now calculate Gomez's economic profit.< Prev8 of 10Next >..... ...51°F Clearere to search

An individual or a firm runs a business with the primary motive of earning profit. Profit is the…

Answered: Gomez runs a small pottery firm. He…

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 8SQP

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Mr. Afzal runs a small pottery ﬁrm. He hires one helper at $12,000 per year, pays annual rent of $5000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4000 per year ifalternatively invested. He has been offered $15,000 per year to work as a potter for a competitor.He estimates his entrepreneurial talents are worth $3000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting proﬁt and the economic proﬁt for Afzal’spottery firm.
Gumez runs a small pottery firm he hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on material. He has $4,0,000 of his own founds invested in equipments that could earn him $4000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a compertoir. H estimates his entre talent are worth $3000 per year. total annual revenue from pottery sale is #72,000. Calculate the accounting profit and the economic profit for Gomez's pottery firm
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Gomez runs a small pottery fem. He hares one helper at $14,500 per year pays annual rent of $7.500 for his shop, and spends $18,000 per year on materials. He has $40,000 of his own funds invested in equipment pottery wheels, kdns, and so forth) that could eam han $5.000 per year if aftermatively invested. He has been offered $23.000 per year to work as a potter for a competitor He estimates he entrepreneurad talents are worth $6,000 per year. Total annual revenue from pottery sales is $86,000 Instructions: Enter your answers as whole numbers a Calculate the accounting profit for Gomez's pottery firm b Now calculate Gomer's economic profit
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