you are considering opening a small flower store. you anticipate that you will earn $100,000 each year in revenue. it will cost you $30,000 each year to rent the space necessary to run your business. additionally, you will need to spend $10,000 each year on flower seeds, utilities, and other expenses necessary to operate your flower shop. you have just graduated from college with a degree in economics and have received an offer to work for a firm with a yearly salary of $70,000. What is your anticipated economic profit of opening the flower shop? $ 60000 Based on this information, you should not open the flower store.

Economic profit is a measure of profitability that considers both explicit costs (such as rent and expenses) and opportunity costs (the value of using sub optimal alternative resources).

It is calculated by subtracting all costs, including opportunity costs, from total sales. Economic profit indicates whether the firm is making more money than the costs incurred given the value of lost alternative opportunities.

The explicit costs (rent and other expenses) and the opportunity cost (the salary you would earn working for the firm) from the revenue is subtracted:

Economic Profit = Revenue - Explicit Costs - Opportunity Cost

Economic Profit = $100,000 - ($30,000 + $10,000) - $70,000

Economic Profit = $100,000 - $40,000 - $70,000

Economic Profit = $60,000

The positive economic profit indicates that the flower shop is expected to generate income beyond the costs incurred.

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