Last year, Jarod left a job that pays $80,000 to run his own bike-repair shop. Jarod's shop charges $65 for a repair, and last year the shop performed 5,000 repairs. Jarod's production costs for the year included rent, wages, and equipment. Jarod spent $60,000 on rent and $120,000 on wages for his employees. Jarod keeps whatever profit the shop earns, but does not pay himself an official wage. Jarod borrowed $30,000 for the shop's equipment at an annual interest rate of 4 percent.

(A) What is Jarod's accounting profit?

(B) What is Jarod's economic profit?

Round your answers to the nearest dollar and include a negative sign if appropriate.

Answer rating: 100% (QA)

Required solution is given below Total Revenue from the shop 500... View the full answer