You own a business and make $100,000/year. You pay yourself $50,000 and have input costs of $20,000. You could rent the land for $5,000. Starting salary at a competing firm is $100,000. What is your accounting profit? Economic profit? Should you stay in business? Would other firms enter into the market? What would change if you found a new niche market to sell your product and your sales jumped to $200,000 and your input costs went up to $30,000? What is your accounting profit? Economic profit? Should you stay in business? Would other firms enter into the market?

You own a business and make $100,000/year. You pay yourself $50,000 and have input costs of $20,000. You could rent the land for $5,000. Starting salary at a competing firm is $100,000. What is your accounting profit? Economic profit? Should you stay in business? Would other firms enter into the market? What would change if you found a new niche market to sell your product and your sales jumped to $200,000 and your input costs went up to $30,000? What is your accounting profit? Economic profit? Should you stay in business? Would other firms enter into the market?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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