Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are

Question

Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The
explicit costs of production are $1,500,000 and the implicit costs of production are
$300,000. The firm has an accounting profit of:
a) $500,000 and an economic profit of
$200,000.
c) $300,000 and an economic profit of
$400,000.
b) $400,000 and an economic profit of
$200,000.
d) $200,000 and an economic profit of
$500,000.

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