Suppose a local floral shop has explicit costs of $200,000 per year and implicit costs of $50,000 per year.If the store earned an economic profit of $50,000 last year,the store's accounting profit equaled:

Question

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Accounting profit is calculated by subtracting explicit costs from total revenue. Given that the economic profit (which accounts for both explicit and implicit costs) is $50,000, and the implicit costs are $50,000, we add these to find the total revenue minus explicit costs. Therefore, the accounting profit is $200,000 (explicit costs) + $50,000 (economic profit) = $250,000 in revenue - $200,000 (explicit costs) = $50,000 + $50,000 = $100,000.

Suppose a Local Floral Shop Has Explicit Costs of $200,000