Sarah owns a loft in downtown Toronto that she uses to run her painting business. She spends $25,000 per year on painting supplies and she makes $110,000 per year in revenues from selling her paintings. Sarah recently received two offers to rent out her loft, one for $22,000 and one for $20,000. If she rents out her loft, she also can work another job and make a yearly salary of $30,000.

What are Sarah's accounting profits?

What are Sarah's economic profits?

Answer rating: 100% (QA)

To calculate Sarahs accounting profits we need to consider only the explicit costs which are the act... View the full answer