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Sarah is a real estate agent who earned​ $100,000 in 2016. At the beginning of​ 2017, Sarah wanted to pursue a new career so she quit her job and became a yoga instructor. In her first​ year, she made total revenue of​ $55,000. The information on the right gives details of​ Sarah's first year in the yoga business. What is​ Sarah's economic​ profit?

Respuesta :

Answer: $ -45,000

Explanation: Economic profit is the difference between accounting profit and opportunity cost.

Economic profit = Accounting profit - Opportunity cost

Sarah left her job as a real estate agent to become a yoga instructor. Therefore ,her opportunity cost is the income she forgoed to become a yoga instructor which is $100,000.

Her accounting profit is $55,000.

Economic profit = 55,000 - 100,000 = $-45000.

I hope my answer helps.

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