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Question: 14 betty runs a shop where she sells 1 each...

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14. Betty runs a shop where she sells $1 each cookie. In a year, she could sell 200,000 cookies average. She employs 5 people who each worked a total of 500 hours a year. She paid them a wage of $10 per hour. She also has costs from equipment and raw materials around $75,000 a year. Other companies have offered to pay Betty $80,000 if she would come to work for them. She could rent out her shop for $5,000; assume there is no depreciation. Betty’s economic profit is (remember: Revenue minus explicit cost = accounting profit; and accounting profit minus implicit cost = economic profit):

$20,000
$5,000
$10,000
$15,000
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