Heidi is the owner of Heidi's Balloon Shop. Last year she earned $100,000 in total revenue. Her explicit costs were $60,000 paid to her employees and suppliers (assume that this amount represents the total opportunity cost of these resources). During the course of the year, she received three offers to work for other balloon shops with the highest offer being $40,000 per year. Calculate Heidi's accounting and economic profit. O Accounting profit = $40,000; economic profit => $0 Accounting profit = $60,000; economic profit = $40,000. O Accounting profit = $40,000; economic profit = negative $20,000. Accounting profit = $0; economic profit = negative $40,000.
Heidi is the owner of Heidi's Balloon Shop. Last year she earned $100,000 in total revenue. Her explicit costs were $60,000 paid to her employees and suppliers (assume that this amount represents the total opportunity cost of these resources). During the course of the year, she received three offers to work for other balloon shops with the highest offer being $40,000 per year. Calculate Heidi's accounting and economic profit. O Accounting profit = $40,000; economic profit => $0 Accounting profit = $60,000; economic profit = $40,000. O Accounting profit = $40,000; economic profit = negative $20,000. Accounting profit = $0; economic profit = negative $40,000.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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