Suppose that a small family farm sold its output for $100,000 in a given year. The family spent $25,000 on fuel, $40,000 on seed, fertilizer, and pesticides, and $25,000 on equipment, including maintenance. The family members could have earned $20,000 working at other occupations.

What is the economic profit at the family farm?

Question

Mathematics

Tatum Tate

27 December, 00:22

Suppose that a small family farm sold its output for $100,000 in a given year. The family spent $25,000 on fuel, $40,000 on seed, fertilizer, and pesticides, and $25,000 on equipment, including maintenance. The family members could have earned $20,000 working at other occupations.

What is the economic profit at the family farm?

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Maritza · Answer 1

First we have to evaluate our income: $100,000. And then the expenditure (sum of all expenses) : $25,000 + $40,000 + $25,000 = $90,000. This is the expenditure, taken away from our income we get $10,000, this is the economic profit of the family farm.