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# Chris was the business manager for a real estate firm earning an annual salary of \$45,000. Then Chris decided to become a consultant.

Chris was the business manager for a real estate firm earning an annual salary of \$45,000. Then Chris decided to become a consultant. Chris hired an administrative assistant at \$20,000 per year and rents office space (utilities included) for \$3,000 per month. Chris earned \$150,000 in total revenue the first year.

Q1 chris's economic profit is?

Q2 chris's normal profit?

The explanation below shows how to... View the full answer

• that's was my answer for the normal profit but unfortunately \$94000 is not one of the answers the only available answers are: \$15000/\$20,000/\$36000/\$45,000
• abdullahti656
• May 09, 2018 at 1:38am
• But that is how normal profits are calculated. what about the answer for economic profits?
• celestinengetich
• May 09, 2018 at 1:41am
• yeah i know, that's why it confused me. and it's true for the economic profits
• abdullahti656
• May 09, 2018 at 1:45am
• I have read somewhere that normal profits equal thecost of production implying that it is zero. In this case, normal profits equal the opportunity cost hence it is \$4500
• celestinengetich
• May 09, 2018 at 1:46am

Economic profit : 82,000\$ Accounting profit : 1,27,000 Economic profit... View the full answer

Economic profit = total revenue - (explicit cost +... View the full answer

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