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    Business and Economic profits

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    A woman managing a photocopying establishment for $25,000 per year decides to open her own duplicating place. Her revenue during the first year of operation is $120,000, and her expenses are as follows:

    Salaries to hired help $45,000
    Supplies 15,000
    Rent 10,000
    Utilities 1,000
    Interest on bank loan 10,000

    Calculate (a) the explicit costs, (b) the implicit costs, (c) the business profit, (d) the economic profit, and (e) the normal return on investment in this business.

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    https://brainmass.com/economics/banking/economic-profits-explicit-implicit-costs-306188

    Solution Preview

    (a) the explicit costs,
    Explicit costs are the actual business costs. Here the explicit costs are

    Salaries to hired help $45,000
    Supplies 15,000
    Rent 10,000
    Utilities 1,000
    Interest on bank loan 10,000

    Total Explicit ...

    Solution Summary

    The solution calculates implicit costs, explicit costs, economic profits and normal profits in the given case.

    $2.49

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