Question: Refer to the table below. The table below shows the monthly economic profit of a drugstore. Total (gross) revenues per month $ 27,000 less explicit

Refer to the table below. The table below shows the monthly economic profit of a drugstore. Total (gross) revenues per month $ 27,000 less explicit costs: Cost of merchandise sold $17,000 Wages to cashier, stock, and delivery help 2,500 Rent and utilities 800 Taxes 700 Total explicit costs $21,000 Accounting profit (revenue minus explicit costs) $6,000 less implicit costs: Wages of owner-manager, 300 hours @ $10 per hour $3,000 Return on inventory, 10% per year on $120,000 1,000 Total implicit costs $4,000 Economic profit (revenue minus all costs) $2,000 If the owner of the drugstore hired a manager for $15 an hour to take his place, how much of a change would show up in: Instructions: Enter your responses as a whole number. Indicate a negative response with a (-) negative sign. (a) Accounting profits per month? $ (b) Economic profits per month? $

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!