Danya plans to open an English course. Currently he earns Rp. 350 million per year teaching a language education institution and will have to give up this job if he opens a new English language course. If he chooses to open an English course, it will cost him rent and other operational costs of Rp. 2 billion per year. a. How much does he need to generate positive accounting profit? b. How much does he need to generate positive economic profit?

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
Section12.1: What Are Costs?
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Danya plans to open an English course. Currently he
earns Rp. 350 million per year teaching a language
education institution and will have to give up this job if
he opens a new English language course. If he chooses
to open an English course, it will cost him rent and
other operational costs of Rp. 2 billion per year.
a. How much does he need to generate positive
accounting profit?
b. How much does he need to generate positive
economic profit?
Transcribed Image Text:Danya plans to open an English course. Currently he earns Rp. 350 million per year teaching a language education institution and will have to give up this job if he opens a new English language course. If he chooses to open an English course, it will cost him rent and other operational costs of Rp. 2 billion per year. a. How much does he need to generate positive accounting profit? b. How much does he need to generate positive economic profit?
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