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# Economic Profit Vs Accounting Profit

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Jaynet spends \$25,000 per year on painting supplies and storage space. She recently received two job offers from a famous marketing firm - one offer was for \$125,000 per year, and the other was for \$105,000. However, she turned both jobs down to continue a painting career. If Jaynet sells 35 paintings per year at a price of \$5,000 each:

a. What are her accounting profits?

\$ _______

b. What are her economic profits?

\$ _______

Please give a definition for both accounting profit and economic profit and show step-by-step calculations for both.

https://brainmass.com/economics/managerial-economics/difference-between-economic-profit-accounting-profit-593866

#### Solution Preview

Cost of Painting Supplies and Storage Space = \$25,000
Offer from Marketing Firm 1 = \$125,000
Offer from Marketing Firm 2 = \$105,000
Unit price per painting = \$5,000
Projected paintings sold = 35

If Jaynet sells 35 paintings per year for the price of \$5,000 each, her revenue ...

#### Solution Summary

This solution illustrates the difference between economic profit and accounting profit by giving a step-by-step example that calculates and contrasts economic profit and accounting profit, incorporating product costs, revenue generated, and opportunity costs.

\$2.19