Tim quit his $50,000 per year job and opened a restaurant. in the first year. Ti

Question

Tim quit his $50,000 per year job and opened a restaurant. in the first year. Tim's restaurant earned $150.000 in revenue. For the same year, Tim paid $50,000 in wages to his employees, spent $30,000 on ingredients. $10,000 rent for the building his restaurant is in and used $10,000 of his personal savings to purchase tables and chairs for his restaurant. Tim was earning 10 percent interest on his savings. Assuming no depreciation in the value of the table and chairs, Tim's economic proft for the year is $50.000 59.000 $100o $9,000

Explanation / Answer

Answer
Economic profit=total revenue-total cost
Total revenue=150000
total cost=salary+wages+ingredient +rent+spent on chairs and tables+interest on the 10000
=50000+50000+30000+10000+10000+0.1*10000
=151000
Economic profit=151000-15000=-1000
option third

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