1. Your firm is selling 10,000 units of output at a price of

$10 per unit. Your firm’s total explicit cost is $70,000.

Your firm’s implicit cost of capital is $10,000, and your opportunity cost is $20,000.

a. Calculate total revenue.

b. Calculate total implicit cost.

c. Calculate your accounting profit.

d. Calculate your economic profit.

e. What does the value of your economic profit calculated in part d tell you?