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Help solving this? Joanne is a 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 rente
Help solving this? Joanne is a 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.
a. Which of Joanne’s costs are explicit costs and what is their total?
b. Which of Joanne’s costs are implicit costs and what is their total?
c. What is the opportunity cost of all factors of production employed by Joanne?
d. What is Joanne’s economic profit?
