Philip Owns and Operates a Gas Station

question 19

Multiple Choice

Philip owns and operates a gas station.Philip works 40 hours a week managing the station but doesn't draw a salary.He could earn $800 a week doing the same work for Terrance.The station owes the bank $100,000 and Philip has invested $100,000 of his own money.If Philip's accounting profits are $1,000 per week while the interest on his bank debt is $300 per week, the business's economic profits are

• A)-$100 per week.
• B)$200 per week.
• C)$0 per week.
• D)$700 per week.
• E)$1,000 per week.

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Definitions:

Products

The substances that result from a chemical reaction.

Reactants

Materials that exist at the beginning of a chemical reaction and are used up to produce end products.

Equilibrium Expression

A mathematical expression that relates the concentrations of the reactants and products at equilibrium in a reversible chemical reaction.

Reaction

A process in which one or more substances are changed into one or more different substances through the reorganization of atomic bonds.