Suppose that a sole proprietorship is earning total revenues of Rs 1,00,000 and is incurring explicit costs of Rs 75,000. If the owner could work for another company for Rs 30,000 a year, we would conclude that—————-
A. the firm is incurring an economic loss.
B. implicit costs are Rs 25,000.
C. the total economic costs are Rs 1,00,000.
D. the individual is earning an economic profit of Rs 25,000.
Answer:A
Suppose that a sole proprietorship is earning total revenues of Rs 1,00,000 and is incurring explicit costs of Rs 75,000. If the owner could work for another company for Rs 30,000 a year, we would conclude that—————-
A. the firm is incurring an economic loss. B. implicit costs are Rs 25,000. C. the total economic costs are Rs 1,00,000. D. the individual is earning an economic profit of Rs 25,000.