Harry's Hookahs incurs $700,000 per year in explicit costs and $500,000 in implicit costs.The company earns $1.4 million in revenues and has $3.7 million in net worth.Based on this information,what is the economic profit for Harry's Hookas?

Question

Quizplus · Accepted Answer

Economic profit is calculated as total revenue minus explicit costs minus implicit costs. Using the given values, we get:
Economic profit = $1.4 million - $700,000 - $500,000
Economic profit = $200,000
Therefore, the best choice is A) $200,000 as this is the economic profit for Harry's Hookahs.

Harry's Hookahs Incurs $700,000 Per Year in Explicit Costs and $500,000