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Jessica is a young doctor who has just started her own practice. Her previous position paid her $80,000 a year. For office space, she uses
Jessica is a young doctor who has just started her own practice. Her previous position paid her $80,000 a year. For office space, she uses a building which she owns and which she has rented in the past for $40,000 a year. Her total revenue from her new practice is $250,000. She pays $50,000 to other firms for materials and supplies, and she pays $40,000 in wages to her office nurse. Assume that Jessica's normal profit is $20,000. She paid utilities of $8,000 and she pays 10% interest on a bank loan of $40,000. Foregone interest totaled $5,000. e. What is Jessica's accounting profit? Show work f. By how much does Jessica's total revenues exceed total cost? Show work I g. Suppose Jessica's revenue fell to $200,000 and costs did not change. The doctor's accounting profit would equal work and her economic profit would equal Show work. Show
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