Save Question 16 (1 point) Lauren is the owner of a bakery that earns O (zero) e

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Save Question 16 (1 point) Lauren is the owner of a bakery that earns O (zero) economic profit. Last year, her total revenue was $145,000, her rent was $12,000, her labor costs were $65,000, and her overhead expenses were $15,000. From this information, we know that her total implicit costs were: A) $77.000 B) $53,000 C) $92,000 D) $15,000 Question 17 (1 point) Ralph owns a small pizza restaurant, where he works full-time in the kitchen. His total revenue last year was $100,000, and his rent was $3,000 per month. He pays his one employee $2,000 per month, and the cost of ingredients and overhead averages $500 per month, Ralph could MacBook Air FT 3 4

Explanation / Answer

ANSWER:

Total revenue = $145,000

explicit costs = rent + labor costs + overhead expenses = $12,000 + $65,000 + $15,000 = $92,000

economic profit = total revenue - explicit costs - implicit costs

0 = 145,000 - 92,000 - implicit costs

implicit costs = 53,000

so the total implicit cost is $53,000 that is option b.

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