Suppose that a small business takes in monthly revenue of $200,000 . Labor, rental, energy, and other purchased input costs come to a total of $170,000 . The owner/entrepreneur's monthly opportunity cost of her time invested in the business is $5,000 (this is what she could earn working elsewhere), and the owner/entrepreneur could get a return of $5,000 each month if she sold her business and
invested the net proceeds in a financial asset such as a treasury bond. Which of the following correctly describes her monthly economic profit?
a. $200,000
b. $190,000
c. $30,000
d. $20,000
d
Economics