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garik1379 [7]
3 years ago
15

A firm had sales revenue of $1 million last year. It spent $600,000 on labor, $150,000 on capital and $200,000 on materials. The

firm's factory sits on land owned by the firm that could be rented out for $30,000 per year. What was the firm's economic profit last year?
Business
1 answer:
faltersainse [42]3 years ago
4 0

Answer:

$80,000

Explanation:

Given that the sales revenue = $1000000

Labor= $600,000

Capital= $150,000

Materials =$200,000

Total expenditure= $(600,000+150,000+200,000)=$950,000

Profit=$1000,000-$950,000=$50,000

Income from renting the space for a year=$30,000

Total economic profit last year= $50,000+$30,000 =$80,000

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