Nader G asked:
Tanya imports sweaters from Peru and sells them from her home. She collects $400,000 in revenue a year, and spends $200,000 on the sweaters and shipping costs, as well as $25,000 on accounting services and utilities. She used to make $100,000 per year working for an advertising agency. Now she works out of the basement of her house, for which she doesn’t have any other marketable use. She has no other expenses.
Tanya’s economic profit is:
A) 75,000
B) 100,000
C) -25,000
D) 175,000
Two possible profits.
D which is her real profit
A which is the profit over and above the profit she made from her original work. There is a word to describe this profit but I cannot remember what it is.