Suppose a local hardware store has explicit costs of $2 million per year and implicit costs of $44,000 per year. If the store earned an economic profit of $50,000 last year, this means that the store's accounting profit equaled:

$94,000

Explanation:

A local hardware store has explicit cost of $2 million per year

The implicit costs are $44,000 per year

The store earned an economic profit of $50,000 last year

Therefore, the store's accounting profit can be calculated as follows

Accounting profit = Implicit costs + economic profit

= $44,000 + $50,000

= $94,000

Hence the store's accounting profit is $94,000

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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