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Sagot :
Accounting profit is $170,000.
Economic profit is $60,000.
What is accounting and economic profit?
Accounting profit is total revenue less explicit cost. Economic profit is accounting profit less implicit cost.
Explicit cost includes the amount expended in running the business. They include rent , salary and cost of raw materials. Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
Accounting profit = total revenue - explicit cost.
Total revenue =price x quantity sold
Accounting profit = ($8,000 x 25) - $30,000 = $170,000
Economic profit = accounting profit - implicit cost
Economic profit = $170,000 - $110,000 = $60,000
Here is the complete question:
jaynet spends $30,000 per year on painting supplies and storage space. she recently received two job offers from a famous marketing firm – one offer was for $110,000 per year, and the other was for $80,000. however, she turned both jobs down to continue a painting career. if jaynet sells 25 paintings per year at a price of $8,000 each:
What are the accounting profit?
What are the economic profit?
To learn more about explicit cost, please check: https://brainly.com/question/25776323
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