Lauren is the owner of a bakery that earns 0 (zero)economic profit.Last year,her total revenue was $145,000,her rent was $12,000,her labor costs were $65,000,and her overhead expenses were $15,000.From this information,we know that her total explicit costs were:

Question

Quizplus · Accepted Answer

Total explicit costs include rent, labor costs, and overhead expenses, which add up to $92,000 ($12,000 + $65,000 + $15,000). As the bakery earns zero economic profit, this means that the total revenue ($145,000) is equal to the total explicit costs ($92,000) plus the total implicit costs (such as the owner's opportunity cost). Therefore, the answer is B.

Lauren Is the Owner of a Bakery That Earns 0