A business owner makes 50 items a day.Each day he/she contributes 8 hours to produce those items.If hired,elsewhere he/she could have earned $10 an hour.The item sells for $10 each.Production does not stop during weekends.If the explicit costs total $10,000 for 30 days,the economic profit for the month equals:

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The business owner makes 50 items/day * 30 days = 1500 items. Revenue = 1500 items * $10 = $15,000. Explicit costs = $10,000. Implicit cost (opportunity cost) = 8 hours/day * 30 days * $10/hour = $2,400. Economic profit = Revenue - Explicit costs - Implicit costs = $15,000 - $10,000 - $2,400 = $2,600.

A Business Owner Makes 50 Items a Day