Wiladee used to work as an office manager,earning $25,000 per year.She gave up that job to start a tailoring business.In calculating the economic profit of her tailoring business,the $25,000 income that she gave up is counted as part of the tailoring firm's
A) total revenue.
B) opportunity costs.
C) explicit costs.
D) marginal costs.

Question

Quizplus · Accepted Answer

The $25,000 income that Wiladee gave up to start her tailoring business is an opportunity cost, which is a type of implicit cost. Therefore, it should be counted as part of the tailoring firm's total opportunity costs in calculating economic profit.

Wiladee Used to Work as an Office Manager,earning $25,000 Per