Susan used to work as a telemarketer,earning $25,000 per year.She gave up that job to start a catering business.In calculating the economic profit of her catering business,how is the $25,000 income that she gave up counted in terms of the catering business

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The $25,000 income that Susan gave up to start the catering business is an opportunity cost. Opportunity cost refers to the cost of the best forgone alternative or the cost of the next best alternative foregone. In this case, Susan gave up the opportunity to earn a salary of $25,000 as a telemarketer, which is the next best alternative for her. Therefore, this cost is considered an opportunity cost rather than direct costs, explicit costs, or sunk costs.

Susan Used to Work as a Telemarketer,earning $25,000 Per Year