Chris was the business manager for a real estate firm earning an annual salary of $40,000.Then Chris decided to become a consultant.Chris hired an administrative assistant at $15,000 per year and rents office space (utilities included)for $3,000 per month.Chris earned $100,000 in total revenue the first year as a consultant.
In order for Chris to earn normal profit,accounting profit would have to be _______.
A)$51,000
B)$40,000
C)0
D)$9,000

Question

Quizplus · Accepted Answer

Chris has implicit costs of $40,000,so an accounting profit of $40,000 would just cover Chris' normal return.

Chris Was the Business Manager for a Real Estate Firm