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Gerry works 40 hours a week managing Gerry's Market, without drawing a salary. He could earn $500 a week doing the same work for Jean.
Gerry works 40 hours a week managing Gerry's Market, without drawing a salary. He could earn $500 a week doing the same work for Jean. Gerry's Market owes its bank $100,000, and Gerry has invested $100,000 of his own money. If Gerry's accounting profits are $1,200 per week while the interest on his bank debt is $200 per week, and dividend on his investment is $5 a week. What is his economic profits? Please explain your answer.
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