The following is cost information for the Creamy Crisp Donut Company Entrepreneur's potential earnings as a salaried worker - $60.000 Annual lease on building = $30,000 Annual revenue from operations = $250,000 Payments to workers = $100,000 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 If, other things equal, Creamy Crisp's revenue rose to $284.000 A. its implicit costs would exceed its economic costs B.it would earn a normal profit but not an economic profit C. it would suffer an economic loss D. it's accounting profit would fall to $0
The following is cost information for the Creamy Crisp Donut Company Entrepreneur's potential earnings as a salaried worker - $60.000 Annual lease on building = $30,000 Annual revenue from operations = $250,000 Payments to workers = $100,000 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 If, other things equal, Creamy Crisp's revenue rose to $284.000 A. its implicit costs would exceed its economic costs B.it would earn a normal profit but not an economic profit C. it would suffer an economic loss D. it's accounting profit would fall to $0
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQP
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The following is cost information for the Creamy Crisp Donut Company Entrepreneur's potential earnings as a salaried worker - $60.000
Annual lease on building = $30,000
Annual revenue from operations = $250,000
Payments to workers = $100,000
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
If, other things equal, Creamy Crisp's revenue rose to $284.000
A. its implicit costs would exceed its economic costs
B.it would earn a normal profit but not an economic profit
C. it would suffer an economic loss
D. it's accounting profit would fall to $0
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