Business, 17.04.2021 20:30 maddieberridgeowud2s

Gomez runs a small pottery firm. He hires one helper at $10,000 per year, pays annual rent of $4,000 for his shop, and spends $16,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4,000 per year if alternatively invested. He has been offered $18,000 per year to work as a potter for a competitor. He estimates he could use his talents to earn an additional $2,000 per year in consulting fees if he were working full time as a potter. Total annual revenue from pottery sales is $65,000. a. Calculate the accounting profit for Gomez’s pottery firm.
b. Now calculate Gomez's economic profit.

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Gomez runs a small pottery firm. He hires one helper at $10,000 per year, pays annual rent of $4,000...

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