Answer:
Profit; $35,000
Explanation:
Given: Insurance paid= $ 32000.
Wages paid= $408000.
Paid for supplies= $23000.
Opportunity cost= $32000
Revenue= $460000.
Now, computing the economic profit.
Economic profit= [tex]Revenue- explicit\ cost- Opportunity\ cost[/tex]
⇒ Economic profit= [tex]460000- (32000+408000+23000)-32000[/tex]
⇒ Economic profit= [tex]460000-463000-32000[/tex]
∴ Economic profit= [tex]\$ 35000[/tex]
Economic profit is the amount of difference between revenue received and explicit expense of the company, while calculating economic profit, we also deduct opportunity cost from revenue earned.
