Scarlett Recently Began Running Her Husband's Lumber Mill

Scarlett recently began running her husband's lumber mill.Last month she took in $5,000 in sales revenue and paid $3,400 in out-of-pocket costs.Did the lumberyard make an economic profit last month?

A) Definitely not.
B) Yes. After considering non-zero explicit and implicit costs, it is clear that her profit is exactly equal to $1,600.
C) Without knowing the magnitude of implicit costs, it is not possible to state whether the lumberyard earned an economic profit last month.
D) Yes, after factoring implicit costs, it is clear that her profit will exceed $1,600.

Correct Answer:

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