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Dan's Car Wash produces $150,000 in revenues and incurs $120,000 in labor wages, materials, rent, and other explicit costs. Moreover, Dan gave up a $40,000-a-year job as a hotel valet to start his car wash business. Dan's economic profit is _____, and he _____ earning a normal profit.

Respuesta :

Answer:

-$10,000 ; is

Explanation:

The computation is shown below:

The economic profit is

= Revenues produced -  labor, wages, materials, rent, and other explicit costs incurred - giving amount

= $150,000 - $120,000 - $40,000

= -$10,000

Now the normal profit is

= Total revenues produced - Total cost incurred

= $150,000 - $120,000

= $30,000

So, the economic profit is -$10,00 and he is earning a normal profit

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