Jillian runs a small printing business. She spends $2000 / month on ink, $30,000 a year on rent for the building, and $60,000 a

Question

4 years ago

14

Jillian runs a small printing business. She spends $2000 / month on ink, $30,000 a year on rent for the building, and $60,000 a

year on her two employees. Jillian makes $120,000 a year in revenue. If she wasn’t in printing, Elsie could also work as a consultant and make $80,000. Year. She could also earn $200,000 by taking advantage of her JD and be in corporate law. What is Jillian’s annual economic profit on the printing business.

Business

1 answer:

Alexxandr [17] · Answer 1 · 2022-01-07T09:46:02+03:00

Answer:

Jillian's annual economic profit on the printing business is $6,000

Explanation:

Cost of ink = $2000/month = $2000×12/year = $24,000/year

Annual rent = $30,000

Annual salary of employees = $60,000

Total annual expenditure = $24,000 + $30,000 + $60,000 = $114,000

Annual revenue = $120,000

Annual economic profit = annual revenue - annual expenditure = $120,000 - $114,000 = $6,000