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Question
Belinda is the owner of a department store. Last year, her total revenue was $525,000 and her total labor costs were $200,000. Her overhead expenses, including insurance and legal fees, were $175,000. The rent on the building was $45,000. Belinda could earn $105,000 per year working at a nearby department store. If her total revenue increases to $600,000 this year and all of her other expenses are held constant, we know that her economic profit is now
a. $75,000.
b. $600,000.
c. $0.00.
d. $105,000.
e. $200,000.
Answer
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