Last week, you established your explicit and implicit costs. You will use these costs to establish your economic profits for this week. Remember, your economic profit is the difference between the total opportunity cost of production and the total revenue received by a company. As you work through your product, you will be building a case why your product should be produced.

This is important to your project because when the market is at a state of equilibrium then the price and quantity is balanced. Remember to remain realistic; at a higher price point the quantity demanded will be higher, thus supply will be higher. The chart is set up so you can record your answers directly within it. Return to the week 1 lecture for more information on market equilibrium. There you will find an example of a demand and supply scheduling chart.

This week, we covered how an economic profit or product loss is the revenue seen from the sale of a product and the cost of all input/opportunity costs. The following formula is used: