Casey operates a stall in a seafood market that is highly competitive. She earns
ID: 1143432 • Letter: C
Question
Casey operates a stall in a seafood market that is highly competitive. She earns $2,000/day, with a stall hire cost of $100/day. As a result of a positive change in consumer preferences for seafood, Casey experiences a large increase in demand for her seafood Select the item from the list provided to make the following statements true 1. Accounting profit 2. -$2000/year 3. Total cost YCasey's daily accounting profit is YCasey was making an economic loss in this market prior to the change in consumer demand. Fortunately, no new entrants arrive in4. Economic profit the market with the increase in demand for seafood. If Casey manages to now achieve a normal profit in the short run, then Casey 6. A normal profit would definitely be making a /an 5. Economic loss 7. $12000/year 8. $33000/year 9. Explicit cost 10. $45000/year 11. $1900 12. Implicit cost Y The stall hire cost is a / an for CaseyExplanation / Answer
Earning or Revenue = $ 2000 / day
Stall hire cost = $ 100 / day
Accounting profit = Revenue - Cost
Casey's daily accounting profit = $ 1900 (=$2000-100).
Since, in the short run she is earning normal profit therefore, in the long run she will earn a Normal Profit. As new market player will enter the market.
The stall hire cost is an Explicit cost for Casey.
Explicit cost means direct cost that incurs to the organization. If caseys is withdrawing salary that is managers salary is termed as implicit cost.