9 February, 09:37

# In a given year, a consulting firm has the following costs: \$600,000 in wages and salaries paid to employees; \$73,000 in rental payments for office space; and \$82,000 for office supplies, advertising, and utilities. In addition, Caroline, the owner of the firm, works for the firm full time (and is not paid a salary, since she receives the firm's profits). If she did not work for the consulting firm, Caroline could earn \$130,000 per year working as a consultant for another firm. For each possible amount of total revenue, fill in the accounting profit and economic profit of the advertising firm.Total Revenue (\$) Accounting Profit (\$) Economic Profit (\$)750,000800,000850,000900,000

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1. 9 February, 13:17
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750,000 - 5,000 - 125,000

800,000 45,000 - 75,000

850,000 95,000 - 25,000

900,000 145,000 15,000

Explanation:

600,000 wages

73,000 rent

82,000 supplies

operating cost 755,000

opportunity cost 130,000

accounting profit revenue - operating cost economic profit = accounting profit - opportunity cost