A firm has explicit costs of $100,000 and implicit costs of $30,000,and generates $150,000 in revenue.How much revenue does it need to have a normal profit?
A)$20,000
B)$30,000
C)$50,000
D)$100,000
E)$130,000

Question

Quizplus · Accepted Answer

To achieve a normal profit, a firm's revenue must cover both its explicit and implicit costs. The total costs here are $100,000 (explicit) + $30,000 (implicit) = $130,000. Therefore, the firm needs $130,000 in revenue to have a normal profit.

A Firm Has Explicit Costs of $100,000 and Implicit Costs