Question

Timmy owns a shoe store that generates monthly revenue of $47,000. Timmy's costs associated with rent, materials and labor equals $39,055 per month. Timmy could work as a turkey farmer instead of owning a shoe store which would generate $11,039 in total revenue per month. Timmy's accounting profit equals _____________ while his economic profit equals ___________.

Answer 1

Timmy's accounting profit equals $7945 while his economic profit equals $3094

Step-by-step explanation:

Accounting profit= $47000- $39055= $7945

Economic profit= $11,039 - $7945= $3094