The annual accounting statement of revenues and costs for a local flower shop shows the following:
Revenues ..........................................$250,000
Supplies ............................................ $25,000
Employee Salaries ...............................$170,000
If the owners of the firm closed its operations, they could rent out the land for $100,000. They would then avoid incurring any of the expenses for employees and supplies. Calculate the shop's accounting profit and its economic profit. Would the owners be better off operating the shop or shutting it down? Explain.