25.07.2022 - 08:12

Suppose Juliana owns a small business making handbags. Each month she makes 18 handbags, which she sells for $100 each. The materials used to make each handbag cost$50. In addition, Juliana uses a spare room in her house to make the handbags and store he

Question:

Suppose Juliana owns a small business making handbags. Each month she makes 18 handbags, which she sells for $100 each. The materials used to make each handbag cost$50. In addition, Juliana uses a spare room in her house to make the handbags and store her supplies. If she were not using the spare room for her business, she would use it as a guest room, an option that Juliana would value at $250 per month. If Juliana weren’t making handbags, she would work at Trader Joe’s earning$800 per month. What is Juliana’s economic profit each month?

a. $650 b.$900

c. $750 d. -$150

Answers (1)
• April 6, 2023 в 02:17
The economic profit for Juliana each month can be calculated as follows: Total revenue from selling handbags = 18 handbags x $100 each =$1,800 Total cost of materials used to make handbags = 18 handbags x $50 each =$900 Opportunity cost of using spare room for business = $250 Opportunity cost of not working at Trader Joe's =$800 Total cost for Juliana = $900 +$250 + $800 =$1,950 Total economic profit = Total revenue - Total cost = $1,800 -$1,950 = -$150 Therefore, the answer is d. -$150, which means that Juliana is not making a profit, but rather incurring a loss of $150 each month. Do you know the answer? Not sure about the answer? Find the right answer to the question Suppose Juliana owns a small business making handbags. Each month she makes 18 handbags, which she sells for$100 each. The materials used to make each handbag cost \$50. In addition, Juliana uses a spare room in her house to make the handbags and store he by subject Business, and if there is no answer or no one has given the right answer, then use the search and try to find the answer among similar questions.
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