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22 November, 05:02

Billy Bob runs a seafood restaurant. Last year he earned $50,000 in revenue. He had explicit costs of $20,000. Billy Bob could have made $30,000 working for the county and could have received an additional $20,000 if he rented out his building and equipment. Calculate Billy Bob's economic profit. Group of answer choices - $20,000 $20,000 $0 $30,000

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  1. 22 November, 05:09
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    Answer: - $20,000

    Explanation:

    Economic profit = Accounting profit - Opportunity cost

    Accounting profit = Total revenue - Explicit cost.

    Total revenue = $50,000

    Explicit cost = $20,000

    Opportunity cost = $30,000 + $20,000 = $50,000.

    Accounting profit = $30,000

    Economic profit = $30,000 - $50,000 = - 20,000
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