Final Exam BA. 5107IP Managerial Economics MBA (International Prograrm) 2018 Ins

Question

Final Exam BA. 5107IP Managerial Economics MBA (International Prograrm) 2018 Instruction: Indicate your answers clearly in this question complete the exam. This exam has a questions. The total paper. You have 3 hess seros yo narks of this examn t5 pener of your grade You are allowed to bring a basic calculator and ad cass materials.Coos sucs local pub in Malibu, earned $24,000 in accounting profit last 1. An intoxicated Pub, a e owner, who had invested 5300,000 in the pub, decided to close the pub. whot can you say about economic profit (and the business? (5 point) nomic profit (and the rate of retur) in Answer:

Explanation / Answer

Economic profit is the cost and opportunity cost a firm pays. Economic profit is the total revenu minus explicit and implicit cost. The firm decides to shut down its business as it is not able to meet the average revenue cost is less than the capital invested by the owner. Though the firm is earning an accounting profit that is it is only able to meet its variable expenses and not the Fixed cost. or this reason, an entity may report an accounting profit but realize an economic loss because resources could have been utilized better.

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