Audra runs a movie memorabilia website. Last year, she earned $35,000 in revenue and had explicit costs of $8,000. Audra could have made $35,000 working for a security company and received an additional $7,500 if she had used the company's inputs in a different way. Calculate Audra’s economic profit.

Audra runs a movie memorabilia website. Last year, she earned $35,000 in revenue and had explicit costs of $8,000. Audra could have made $35,000 working for a security company and received an additional $7,500 if she had used the company's inputs in a different way. Calculate Audra’s economic profit.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 8WNG

See similar textbooks

Similar questions

Describe and explain fully the type of economic profit that Is earned if price exceeds average cost. In Deep detail with at least 3 pages long
Taylor used to work as a yoga instructor at the local gym earning $27,000 a year. Taylor quit that job and started working as a personal trainer. Taylor makes $60,000 in total annual revenue. Taylor's only out-of-pocket costs are $12,000 per year for rent and utilities, $1,000 per year for advertising and $1,500 per year for equipment. Taylor's accounting profit is _______, and Taylor's economic profit is _______.
The industry says you can sell 5 sweaters for $25, 6 sweaters for $36, or 7 sweaters for $40. Using the TC listed above, where do you receive an economic profit?
Describe several ways a firm could lower their costs.
Tammy quit her job as a math teacher making $70,000 per year to start her own online business. The first-year revenue totaled to $200,000. During the first year of online business, Tammy paid $50,000 for the office rent and $20,000 for utilities and supplies. What is the amount of economic profit generated from Tammy’s online business?
Tsubasa Kajitani can earn $4 million per year as a professional golfer. Suppose she quits golf and opens a sushi restaurant. Rent on the restaurant is$175,000 per year. Her payroll is $200,000, she has utility bills of $30,000 per year and her food and other materials costs is $450,000 per year.Tsubasa's sushi restaurant generates $900,000 in revenue its first year. Tsubasa's economic profit is
If a Prof leaves their $100,000 per year job to start a business that earns annual revenue $400,000, and has annual labour and rental costs of $200,000, the economic profit of the business is $200,000. True or false and explain why. Use graphs if needed.
Profit maximization using total cost and total revenue curves Suppose Caroline runs a small business that manufactures shirts. Assume that the market for shirts is a competitive market, and the market price is $20 per shirt. The following graph shows Caroline's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for shirts quantities zero through seven (inclusive) that Caroline produces. Caroline's profit is maximized when she produces______ shirts. When she does this, the marginal cost of the last shirt she produces is ______, which is (GREATER OR LESS) than the price Caroline receives for each shirt she sells. The marginal cost of producing an additional shirt (that is, one more shirt than would maximize her profit) is _____, which is (GREATER OR LESS) than the price Caroline receives for each shirt she sells. Therefore, Caroline's profit-maximizing quantity corresponds to the…
Kristin runs an antiques store. Last year, she earned $35,000 in revenue and had explicit costs of $8,000. Kristin could have made $35,000 testing information security equipment and received an additional $2,000 if she had used the company's inputs in a different way. Calculate Kristin’s economic profit.
-Briefly discuss average costs, including how they are calculated, how they are typically appear on a graph, and what they relate to profitability. -Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs? -Briefly explain what is meant by the term "variable costs" and provide three examples of same. -Briefly explain how the total revenue for a profit-seeking firm is determined.
A young chef is considering opening his own sushi bar. To do so, he would have to quit his current job, which pays $30,000 a year, and take over a restaurant space that he owns and currently rents to his brother for $24,000 a year. His expenses at the sushi bar would be $50,000 for food and $2,000 for gas and electricity. Suppose the sushi bar’s revenue from the first year is $120,000. What is the chef’s economics profit? 14,000 -14,000 66,000 68,000
The table below presents the average and marginal cost of producing cheeseburgers per hour at a roadside diner. Cheeseburger Production Costs Quantity(burgers per hour) Average Variable Cost (dollars) Average Total Cost (dollars) Marginal Cost (dollars) 0 — — — 10 $1.00 $6.60 $1.00 20 0.70 3.50 0.40 30 0.70 2.57 0.70 40 0.78 2.18 1.00 50 0.88 2.00 1.30 60 1.07 2.00 2.00 70 1.34 2.14 3.00 80 1.74 2.44 4.50 90 2.23 2.86 6.20 100 2.81 3.37 8.00 a. At a quantity of 40 cheeseburgers per hour, the average total cost of production is (Click to select) falling rising at a minimum and the marginal cost of cheeseburger production is (Click to select) falling rising at a minimum . b. At a quantity of 60 cheeseburgers per hour, the average variable cost of production is (Click to select) falling rising at a minimum and the average total cost of cheeseburger production is (Click to select) falling rising at a minimum .