As part of an estate settlement Katie received S1 million. She decided to use the money to purchase a small business. Her business operates in a perfectly competitive industry. If Katie would have invested the $1 million in a risk free bond fund, she could have earned $100,000 worth of interest each year. She also quit her job to devote all her time to her new business. Her salary at her former job was $ 75,000 per year. At the end of the first year of operating her new business, Katie's accountant reported an accounting profs of S175,000. What was Katie's economic profit ? A.$ 50,000 B. $ 0 C. $25,000 D. $100,000
As part of an estate settlement Katie received S1 million. She decided to use the money to purchase a small business. Her business operates in a perfectly competitive industry. If Katie would have invested the $1 million in a risk free bond fund, she could have earned $100,000 worth of interest each year. She also quit her job to devote all her time to her new business. Her salary at her former job was $ 75,000 per year. At the end of the first year of operating her new business, Katie's accountant reported an accounting profs of S175,000. What was Katie's economic profit ? A.$ 50,000 B. $ 0 C. $25,000 D. $100,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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As part of an estate settlement Katie received S1 million. She decided to use the money to purchase a small business. Her business operates in a
A.$ 50,000
B. $ 0
C. $25,000
D. $100,000
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