Harry's Hookahs incurs $700,000 per year in explicit costs and $500,000 in implicit costs.The company earns $1.4 million in revenues and has $3.7 million in net worth.Based on this information,what is the economic profit for Harry's Hookahs?

Question

Quizplus · Accepted Answer

Economic profit is calculated by subtracting both explicit and implicit costs from total revenues. Here, it's $1.4 million - ($700,000 + $500,000) = $200,000.

Harry's Hookahs Incurs $700,000 Per Year in Explicit Costs and $500,000