Question

Question 6-Costs of Production: Suppose that a small hair styling salon had revenues of $150,000 in a given year. The owner spent $10,000 on utilities, $60,000 on supplies (shampoo, conditioner, hair coloring and other chemicals, etc.), and $50,000 on equipment (mirrors, chairs, scissors, curling irons, etc.), including maintenance. The owner could have eaned $50,000 working at another salon. a) b) What is the accounting profit for the hair styling salon? What is the economic profit for the hair styling salon?

Answer 1