Use the inforrmation here and in the table below to calculate the opportunity co

Question

Use the inforrmation here and in the table below to calculate the opportunity cost of economic profit for Carla's Custom Canoes (CCC) in 2014. Suppose CCC's total revenue was $250,000 in 2014, and Carla left her job as park ranger making $49,000 to start her canoe business. Cost of resources bought in the market fiberglass $42,000 $13,000 $52,000 $ 3,200 Economic deprecation s 4 500 foregone interest S 3,500 $36,000 paint utilities Cost of resources owned by CCOC Cost of resources supplied by Carla normal profit 1 The sum of all of the items in the table and ranger will Number Opportunity cost of production: $ 57000 ion. Number Economic proft $ 46800

Explanation / Answer

As it mentions in red, the opportunity cost is equal to the sum of all the items in the table and Carla's Forgone wages as a Park Ranger. This is equal to: 42,000+13,000+52,000+3,200+4,500+3,500+36,000+49,000 = 203,200.

Finally, the economic profit can be calculated as Total Revenue - Total Costs (Including the opportunity Cost) = 250,000 - 203,200 = 46,800 (Which is what you got, the right answer above)

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