Florence Is Considering Going into Business for Herself and Has

question 61

Essay

Florence is considering going into business for herself and has developed the following estimates of monthly costs and revenues to aid her in her decision-making process.She has decided to house the business in a building that she already owns,although she could rent the building to someone else for $1,000 per month.Estimated payments for utilities (electricity,natural gas,water,and telephone)are $475 per month.She will hire one employee at a total cost of $1,100 per month.Inventory is estimated to cost $2,800 per month.Finally,Florence earns $3,000 a month in her current job.
a.How much monthly revenue would Florence have to take in to earn 0 economic profit?
b.Assume that Florence has estimated her monthly revenue to be $9,000.In this case,Florence would earn an accounting profit (loss)of ________,and an economic profit (loss)of ________.
c.Assume instead that Florence does not own a building,and that she will have to rent a building for $1,000 per month (all other estimates remain the same).In this case (assuming estimated monthly revenue is still $9,000),Florence would earn an accounting profit (loss)of ________,and an economic profit (loss)of ________.

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Definitions:

Dependence

A state in which an organism can only function normally in the presence of a particular substance, leading to physical or psychological withdrawal symptoms.

Anandamide

A naturally occurring cannabinoid in the human body, involved in various physiological processes including appetite, pain-sensation, mood, and memory.

Appetite

A natural desire to satisfy a bodily need, especially for food, influenced by psychological and physiological mechanisms.

Mood Regulation

Mood regulation refers to the processes by which individuals influence their own emotional states, aiming to maintain a stable mood or to adjust it in response to their perceived emotional needs.