8.1 As shown in the table below, Pudge’s accounting profit is now $10,000, the difference between his $20,000 annual revenue and his $10,000-per-year payment for land, equipment, and supplies. His economic profit is that amount minus the opportunity cost of his labor—again, the $11,000 per year he could have earned as a store manager. So Pudge is now earning a negative economic profit, $1,000 per year. As before, his normal profit is the $11,000-per-year opportunity cost of his labor. Although an accountant would say Pudge is making an annual profit of $10,000, that amount is less than a normal profit for his activity. An economist would therefore say that he is making an economic loss of $1,000 per year. Since Pudge likes the two jobs equally well, he will be better off by $1,000 per year if he leaves farming to become a manager.