Gomez 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 $18000 per year on materials. He has $40000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $5000 per year if alternatively invested. He has been offered $23000 per year to work as a porter for a competitor.he estimates his entrepreneurial talents are worth $6000 per year. Total revenue from pottery sales is $86,000. Calculate the accounting profit and the economic profit for Gomez's pottery firm
Gomez 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 $18000 per year on materials. He has $40000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $5000 per year if alternatively invested. He has been offered $23000 per year to work as a porter for a competitor.he estimates his entrepreneurial talents are worth $6000 per year. Total revenue from pottery sales is $86,000. Calculate the accounting profit and the economic profit for Gomez's pottery firm
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Gomez 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 $18000 per year on materials. He has $40000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $5000 per year if alternatively invested. He has been offered $23000 per year to work as a porter for a competitor.he estimates his entrepreneurial talents are worth $6000 per year. Total revenue from pottery sales is $86,000. Calculate the accounting profit and the economic profit for Gomez's pottery firm
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