Libby has a business using no owned capital and makes an accounting profit of $52,000 a year. Libby could have worked for Verizon Wireless with a pay of $35,000 a year, but she would not have had time to run her business. The economic profit from Libby's business per year is

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Economic profit is calculated by subtracting the opportunity cost (what could have been earned as an alternative) from accounting profit. In this case, the opportunity cost is the $35,000 Libby could have earned working for Verizon Wireless. Therefore, economic profit is $52,000 - $35,000 = $17,000.

Libby Has a Business Using No Owned Capital and Makes