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14 December, 07:54

The Wax Works sells 400 candles at a price of $6 per candle. The Wax Works' total costs for producing 400 candles are $2500. The Wax Works' economic profit is

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  1. 14 December, 11:12
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    The Wax Works' economic profit is - $100

    Explanation:

    Economic Profit : The economic profit is that profit which shows a difference between sales revenue, all types of cost such as explicit & implicit cost, and opportunity cost.

    In mathematically,

    Economic Profit = Selling cost - Total cost

    where,

    Selling cost = Selling Units * Price

    = 400 * $6

    = $2,400

    And, total cost = Total cost Units * Price

    = 400 * $6.25

    = $2,500

    Now, applying these values to the above equation.

    So, economic profit = $2,400 - $2,500 = - $100

    Hence, The Wax Works' economic profit is - $100
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