Respuesta :
The remaining $25,000 represents the profits earned by the Rescooperate Ice Cream Shop.
Further explanation:
Profits: A producer engages in the production activity with a motive to earn profits after selling of the produced goods. The profits of the producers are measured by the following equation:
[tex]\begin{aligned}Profits=Revenue-Costs\end{aligned}[/tex]
Justification for correct and incorrect option:
profit: This option is correct.
Profits of a firm are measured by subtracting the costs incurred by the firm from its overall generated revenue. Rescooperate Ice Cream Shop raised $100,000 last year by selling ice creams. And, the costs incurred on supplies and factory space by the Ice Cream Shop are $75,000. The difference between the two is $25,000 that represents the profits earned by the Ice Cream Shop.
loss: This option is incorrect.
A firm incurs a loss when its revenue from the sale of goods and services is less than its costs incurred. Here, Rescooperate Ice Cream Shop has raised revenue of $100,000 that is more than the costs incurred of $75,000. Thus, the Ice Cream Shop has made a profit, not a loss.
revenue: This option is incorrect.
The revenue of a firm is an amount that the firm raises by selling goods and services. Rescooperate Ice Cream Shop has made $100,000 by selling goods and services. Thus, the revenue of the Ice Cream Shop is $100,000, not $25,000.
expense: This option is incorrect.
The expense of a firm is an amount that the firm incurs for facilitating the production activities. Rescooperate Ice Cream Shop has incurred $75,000 on supplies and factory space. Thus, the expense of the Ice Cream Shop is $75,000, not $25,000.
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Answer details:
Grade: High School
Subject: Economics
Chapter: Profits and Loss
Keywords: rescooperate ice cream shop, analyzed their books, found in the past year, selling ice creams, spent, supplies and factory space, remaining represents, profit, loss, revenue, expense, the motive to earn profits, producers engage in production activities, ice cream shop, expenditure to facilitate production activity.
The remaining $25000 in this question represents profit.
Profit can be described as the gains that are made from a business venture. It is what is made after the expenditures have been made in the business.
With this explanation in mind, the Ice cream shop made the following expenses, $75,000 was spent on getting the business set up.
The money they made after the business was made $100,000. If we subtract the money they used to set the business up, what is left is the profit they made.
100000-75000 = 25000
The remaining $25000 is therefore their profit.
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