Joe is the owner-operator of Joe's Haircuts Unlimited. Last year he earned $175,000 in total revenues and paid $110,000 to his employees and suppliers. During the course of the year, he received three offers to work for other barbers, with the highest offer being $60,000 per year. Is Joe earning a normal profit? No, he is earning an above-normal profit. O No, but he is earning an accounting profit and that is all that matters. O Yes, but his economic profit is $0 and that is not good. O We cannot be sure, because "normal" profit is a subjective judgment. O No, his economic profit is negative.

Joe is the owner-operator of Joe's Haircuts Unlimited. Last year he earned $175,000 in total revenues and paid $110,000 to his employees and suppliers. During the course of the year, he received three offers to work for other barbers, with the highest offer being $60,000 per year. Is Joe earning a normal profit? No, he is earning an above-normal profit. O No, but he is earning an accounting profit and that is all that matters. O Yes, but his economic profit is $0 and that is not good. O We cannot be sure, because "normal" profit is a subjective judgment. O No, his economic profit is negative.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter2: Mathematics For Microeconomics

Section: Chapter Questions

Problem 2.8P

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