A local business earned total revenue of $100,000 against economic costs of $85,000, with the difference going to investors. If investors put in $200,000 and expect a 5% return on their investment, this business is earning a _____ economic profit.

Question

Quizplus · Accepted Answer

The business earned a positive economic profit because its total revenue ($100,000) exceeded its economic costs ($85,000). The difference between total revenue and economic costs is $15,000, which is greater than the $10,000 that investors would have earned if they had received a 5% return on their investment of $200,000.

A Local Business Earned Total Revenue of $100,000 Against Economic