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):
