Author Question: Accounting vs. Economic ProfitA firm uses capital and labor as inputs and sells 2,100 units of ... (Read 116 times)

Tb12162018 · **on:** Nov 23, 2022

Accounting vs. Economic Profit

A firm uses capital and labor as inputs and sells 2,100 units of output per year at the going market price of $40. Total labor costs of the firm are $11,000 annually and the total capital stock of the firm is currently worth $40,000. The return available to investors with comparable risks is 7 percent annually and there is no depreciation. What is the accounting profit of the firm? What is the economic profit?
Please round your final answer to two decimal places.
◦ $27,285.71, $73,000.00
◦ $73,000.00, $118,714.29
◦ $73,000.00, $27,285.71
◦ $27,285.71,$118,714.29

khammond77 · **Reply #1 on:** Nov 23, 2022

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