A firm is earning an accounting profit of $15,000

Economics Dec 16, 2020

A firm is earning an accounting profit of $15,000. Its implicit costs are $2,000, explicit costs are $10,000, and its economic profit is $13,000. What must its total revenue be?

$16,000

$25,000

$28,000

$30,000

Indeterminate

Expert Solution

Computation of Total Revenue:

Accounting Profit = Total Revenue - Explicit Costs

$15,000 = Total Revenue - $10,000

Total Revenue = $15,000+$10,000

Total Revenue = $25,000

So, the correct option is 2nd "$25,000".

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