Suppose That for Last Year, Sarah's Small Business Earned an Accounting

question 6

Multiple Choice

Suppose that for last year, Sarah's small business earned an accounting profit of $70,000 and an economic profit of $20,000. What can we correctly infer about Sarah's business?

• A)The difference between Sarah's total opportunity costs and her accounting costs is $50,000.
• B)Sarah's explicit costs were $50,000
• C)Sarah's total opportunity cost of her resources was $50,000.
• D)Sarah's firm cannot be maximizing profit.