A firm has $200 million in total revenue and explicit costs of $190 million. Suppose its owners have invested $100 million in the company at an opportunity cost of 10 percent interest rate per year....



A firm has $200 million in total revenue and explicit


costs of $190 million. Suppose its owners have


invested $100 million in the company at an opportunity cost of 10 percent interest rate per year. The


firm’s economic profit is


a. $400 million.


b. $100 million.


c. $80 million.


d. zero.



May 26, 2022
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