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ed is a free lance writer who could work for an accounting firm at $25,000 a year but instead works for himself for $41,000 a year. his only business expenses are $1,000 for supplies and $12,000 for rent. ed's accounting profit is $28,000. the value of ed's economic profit from working for himself is?

Respuesta :

The value of Ed's economic profit from working for himself is $3,000.

What is the value of the economic profit?

Economic profit is the accounting profit less the implicit cost or opportunity cost. Implicit cost is the cost of the next best option a decision maker forgoes when he chooses one option over the next best option. The implicit cost in this question is the income Ed could have earned at the accounting firm.

Economic profit = accounting profit - implicit cost

Accounting profit is the difference between the revenue of a business and its explicit cost. Explicit cost are the cost that are actually incurred in the course of running a business. Examples of explicit cost include the cost of rent and supplies.

Accounting profit = revenue - explicit cost

Economic profit = accounting profit - implicit cost

Economic profit = $28,000 - $25,000

Economic profit = $3,000

To learn more about economic profit, please check: https://brainly.com/question/15036999

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