Thomas owns and operates an Electronics and Computer shop in Los Angeles. While Thomas has a

QUESTION

Thomas owns and operates an Electronics and Computer shop in Los Angeles. While Thomas has a Mechanical Engineering degree and could work for CISCO Systems Corp. earning $76,000 a year his true passion is managing his own shop. Below is a list of Reggie’s expenses for 2014. Use the following information to answer the questions: (show your work)Revenue in 2014$95,000Rent$15,000Equipment cost$4,200Supplies$2,750What is Thomas’s Accounting Profit? What is Thomas’s Economic Profit?Given Thomas’s economic profit why does he still decide to manage his own shop instead of working for CISCO?

ANSWER:

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