Homework Answers
Revenue = $842,000
Wholesale cost = $452,000
Utility bills and wages = $301,000
Implicit cost of Antonio working as accountant = ($842,000) - ($452,000 + $301,000) = $89,000
Rent = $38,000
Accountant salary = $48,000
Revenues of Antonio working as an accountant = $38,000 + $48,000 = $$86,000
Economic Profit of working as accountant= $86,000 - $89,000 = -$3,000
So, economic profit as an accountant = -$3,000
So, if Antonio's goal is to maximize economic profit, he should stay in the boat business
In the boat business, Antonio is earning normal profit (profit > 0)
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