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Fred Earns $50,000 Business Profit Per Year by Selling Donuts

Question 12

Multiple Choice

Fred earns $50,000 business profit per year by selling donuts. He pays $12,000 per year in rent to his Uncle George for the building in which his business is located. If his Uncle George gives him the building, then Fred's


A) business profit will increase by $12,000 per year.
B) economic profit will increase by $12,000 per year.
C) implicit cost will decrease by $12,000 per year.
D) All of the above are correct.

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