Dr. Khan starts his own dental practice after quitting his $150,000 job at The Mall Dental Clinic. His revenues for the first year are $500,000
He paid $90,000 in rent for the dental office, $60,000 for his office manager's salary, $24,000 for the dental hygienist, $150,000 for insurance, and $6,000 for other miscellaneous costs. The normal profit from running his business is $20,000. Which of the following statements is true? A) His accounting profit is $350,000.
B) His economic profit is $150,000.
C) His economic profit is zero.
D) His accounting profit is zero.
E) None of the above answers is correct.
C
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In the short run, average fixed cost is constant as output increases
Indicate whether the statement is true or false
Refer to Figure 11.1. Assume the economy is in equilibrium at 1 = 0. Other things equal, a negative demand shock such as the financial crisis of 2007-2009 would result in a movement from point ________ to point ________
A) A; B B) B; A C) A; C D) A; D