estion) Consider a firm that uses capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. Also assume that the total labor costs to the firm are $45,000 annually. Assume further that the total capital stock of the firm is currently worth $100,000, that the return available to investors with comparable risk is 10 percent annually, and that there is no depreciation. a. Calculate Explicit costs (list the items). b. Calculate Implicit costs (list the items). " с. Calculate Accounting profit. d. Calculate Economic profit. OCT 19

estion) Consider a firm that uses capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. Also assume that the total labor costs to the firm are $45,000 annually. Assume further that the total capital stock of the firm is currently worth $100,000, that the return available to investors with comparable risk is 10 percent annually, and that there is no depreciation. a. Calculate Explicit costs (list the items). b. Calculate Implicit costs (list the items). " с. Calculate Accounting profit. d. Calculate Economic profit. OCT 19

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

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 2E

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