What is the Economic Profit? Michelle won $10,000 at the races. With these winnings she buys a

 What is the Economic Profit?

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Michelle won $10,000 at the races. With these winnings she buys a hot dog stand which sells the best hot dogs in Newtown. To do this she has to give up her job as an economics tutor, which paid $6,000 per year. The best rate of return she can earn on the purchase of a financial asset is 10% per year. In her first year of selling hot dogs her revenue was $20,000 and the cost of rolls, hot-dogs, and sauces amounted to $13,500. Michelle won $10,000 at the races. With these winnings she buys a hot dog stand which sells the best hot dogs in Newtown. To do this she has to give up her job as an economics tutor, which paid $6,000 per year. The best rate of return she can earn on the purchase of a financial asset is 10% per year. In her first year of selling hot dogs her revenue was $20,000 and the cost of rolls, hot-dogs, and sauces amounted to $13,500.

Answer rating: 100% (QA)

Steps Step 1 of 2 Answer To calculate Michelles economic profit we need to subtract her explicit cos... View the full answer