The following is cost information for the Creamy Crisp Donut Company.

Entrepreneur's potential earnings as a salaried worker = $38,000

Annual lease on building = $20,000

Annual revenue from operations = $280,000

Payments to workers = $118,000

Utilities (electricity, water, disposal) costs = $8,000

Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000

Entrepreneur's forgone interest on personal funds used to finance the business = $6,000

Creamy Crisp Donut Company

Multiple Choice

• has lower explicit costs, than implicit costs.
• is earning a normal profit but not an economic profit.
• is earning an economic profit.
• is suffering an economic loss, when implicit costs are considered.