Answer:
Option c
Explanation:
Given:
Total revenue = $ 100,000
Rent for one month = $ 3,000
Total Rent paid in the year = $ 3000 × 12=$ 36,000
Amount paid to the employee per month = $ 2,000
Total amount paid to the employee in the year = $ 2,000 × 12 = $ 24,000
Per month cost of ingredient and overhead = $ 500
The total ingredient and overhead for the year = $ 500 × 12 = $ 6,000
Implicit cost for the year = $ 35,000
Therefore,
The total expenses = $ 36,000 + $ 24,000 + $ 6,000 = $ 66,000
Thus,
The economic Profit = Total Revenue - expenses - Implicit Costs
or
= $ 100,000 - $ 66,000 - $ 35,000
or
= - $ 1000
hence, the correct answer is option C
