The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential earnings as a salaried worker = $38,000 Annual lease on building = $20,000 Annual revenue from operations $280,000 Payments to workers $118,000 Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 17 %3D eBook Creamy Crisp Donut Company Multiple Choice has lower explicit costs, than implicit costs. is earning a normal proft but not an economic profit. is earning an economic profit. is suffering an economic loss, when implicit costs are considered.
The following is cost information for the Creamy Crisp Donut Company. Entrepreneur's potential earnings as a salaried worker = $38,000 Annual lease on building = $20,000 Annual revenue from operations $280,000 Payments to workers $118,000 Utilities (electricity, water, disposal) costs = $8,000 Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 17 %3D eBook Creamy Crisp Donut Company Multiple Choice has lower explicit costs, than implicit costs. is earning a normal proft but not an economic profit. is earning an economic profit. is suffering an economic loss, when implicit costs are considered.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 3E
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