Scarlett recently began running her husband's lumber mill. Last month she took in $5000 in sales revenue and paid $3400 in out-of-pocket costs. Did the lumberyard make an economic profit last month?

Question

Quizplus · Accepted Answer

Implicit costs, such as the opportunity cost of Scarlett's time or other resources she could have invested elsewhere, must be considered in calculating economic profit. Without this information, we cannot determine if an economic profit was made.

Scarlett Recently Began Running Her Husband's Lumber Mill