Problema Solution
Laura's Pizza Place incurs $800,000 per year in explicit costs and $100,000 in implicit costs. The restaurant earns $1.3 million in revenues and has $5 million in net worth. Based on this information, what is economic profit for Laura's Pizza Place?
Answer provided by our tutors
Economic Profit = Total Revenues − Explicit Costs − Implicit Costs
Economic Profit = 1,300,000.00 − 800,000.000 − 100,000.00
Economic Profit = $500,000.00