Ask Question
27 April, 00:27

Jing is considering starting a new business selling organic groceries. It would cost her $350,000 a year to rent store space and buy the groceries from a wholesaler, and she would have to quit her current job and give up a $70,000 annual salary. a. What is Jing's opportunity cost of starting the business? b. If Jing can make an accounting profit of $50,000 a year selling the organic groceries, should she start the business?

+5
Answers (1)
  1. 27 April, 01:22
    0
    Answer: A. $70,000

    No

    Explanation:

    Opportunity cost is the cost of forgone opportunity. It is what Jing would have earned ($70000) if she didn't start her business.

    Even though Jing is making an accounting profit, her economic profit is negative,$-20,000.

    Economic profit = Accounting profit - Opportunity cost
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Jing is considering starting a new business selling organic groceries. It would cost her $350,000 a year to rent store space and buy the ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers