The Following Is Cost Information for the Creamy Crisp Donut

question 217

Multiple Choice

The following is cost information for the Creamy Crisp Donut Company.Entrepreneur's potential earnings as a salaried worker = $40,000Annual lease on building = $25,000Annual revenue from operations = $420,000Payments to workers = $150,000Utilities (electricity, water, disposal) costs = $8,000Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000Entrepreneur's forgone interest on personal funds used to finance the business = $6,000If, other things equal, Creamy Crisp's revenue fell to $309,000,

• A)its implicit costs would exceed its economic costs.
• B)it would earn a normal profit but not an economic profit.
• C)it would suffer an economic loss.
• D)its accounting profit would fall to $0.

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