Dane decides to give up a job earning $200,000 per year as a corporate lawyer and converts

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Dane decides to give up a job earning $200,000 per year as a corporate lawyer and converts the duplex that he owns into a UFO museum. (He had been renting out the duplex for $20,000 a year.) His explict costs are $75,000 per year paid to his assistants and $10,000 per year for utilities. Fans flock to the museum to see his collection of extraterrestrial paraphernalia, which he could easily sell on eBay for $1,000,000. Over the course of the year, the museum brings in revenues of $200,000.
a. How much is Dane's accounting profit for the year?
b. Is Dane earning an economic profit? Explain.
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Microeconomics

ISBN: 9780135952955

8th Edition

Authors: Glenn Hubbard, Anthony Patrick O Brien

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