Suppose a firm has the following expenditures per day: $250 for wages and salaries, $50 for materials, $60 for equipment, and $40 for rent.  The market wage for the manager is $120 per day but the owner-manager does not draw a salary. Assume the daily revenue is $420. What is the economic profit for the firm described above?  Just give formula.

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Accounting and Economic Profit analysis

One comes across the concept of Profits in the context of business and in analyzing the results of business activity. Profits of a business can be accounting profits, and they can also be economic profits. So how does one understand the concept of accounting versus economic profits?