Question

Lauren is the owner of a bakery. Last year, her total revenue was $145,000, her rent was $12,000, her labor costs were $65,000, and her overhead expenses were $15,000. If she could earn $53,000 working for another bakery nearby, we know that her economic profit was A) $53,000. B) $65,000 ? C)$0. D) $145,000.

Answer 1

So if you subtract the cost of everything for her bakery she still comes out with making 53,000, so if she left she would not earn any profit because she would be making the same.