If a firm has total revenue of $100,000, the owner's labor in the firm is valued at $20,000, and the firm has explicit costs of $90,000, then the firm has earned a(n)

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Quizplus · Accepted Answer

To calculate economic profit, we subtract both explicit and implicit costs from total revenue. The owner's labor, which is valued at $20,000, is considered an implicit cost. Therefore, economic profit is $100,000 - $20,000 - $90,000 = -$10,000, indicating a negative economic profit.

If a Firm Has Total Revenue of $100,000, the Owner's