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17 September, 17:06

Jillian runs a small printing business. She spends $2000 / month on ink, $30,000 a year on rent for the building, and $60,000 a year on her two employees. Jillian makes $120,000 a year in revenue. If she wasn't in printing, Elsie could also work as a consultant and make $80,000. Year. She could also earn $200,000 by taking advantage of her JD and be in corporate law. What is Jillian's annual economic profit on the printing business.

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  1. 17 September, 18:56
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    Jillian's annual economic profit on the printing business is $6,000

    Explanation:

    Cost of ink = $2000/month = $2000*12/year = $24,000/year

    Annual rent = $30,000

    Annual salary of employees = $60,000

    Total annual expenditure = $24,000 + $30,000 + $60,000 = $114,000

    Annual revenue = $120,000

    Annual economic profit = annual revenue - annual expenditure = $120,000 - $114,000 = $6,000
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