Victor is the recipient of $1 million from a lawsuit. victor decides to use the money to purchase a small business in florida. his business operates in a perfectly competitive industry. if victor would have invested the $1 million in a risk-free bond fund, he could have earned $100,000 each year. after he bought the small business, victor quit his job as a market analyst with research, inc., where he used to earn $75,000 per year.
at the end of the first year of operating his new business, victor’s accountant reported an accounting profit of $150,000. what was victor’s economic profit?
a. $150,000
b. $50,000
c. $25,000
d. $25,000what is victor’s opportunity costs of operating his new business?
a. $25,000
b. $75,000
c. $100,000
d. $175,000
how large would victor's accounting profits need to be to allow him to attain zero economic profit?
a. $100,000
b. $125,000
c. $175,000
d. $225,000