Asked by
Jordan Davis
on Oct 12, 2024
Verified
You borrow $10,000 at an interest rate of 5% to open a snow cone stand.You will earn an economic profit if
A) the return on your investment is 5%.
B) the return on your investment is greater than 5%.
C) the return on your investment is between 0 and 5%.
D) the return on your investment is 10% or greater.
Economic Profit
The surplus or profit remaining after deducting both explicit and implicit costs, including opportunity costs, from total revenues.
Interest Rate
The percentage charged on a loan or paid on deposits over a specific period of time, often annually.
- Identify the differences between explicit and implicit costs, and understand their importance in the estimation of economic profit.
Verified Answer
KS
Learning Objectives
- Identify the differences between explicit and implicit costs, and understand their importance in the estimation of economic profit.
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