Jeb “BBQ” Bush sells 5,000 pints of Gator Tail Brunswick Stew© every weekend for

Question

Jeb “BBQ” Bush sells 5,000 pints of Gator Tail Brunswick Stew© every weekend for $15 per pint. He pays his employees $18,000 per week. He pays $2,000 per week for the loan on his equipment. He pays $5,000 per week to the bank to pay for his mortgage for his swamp shack where he cooks the stew. He spends $35,000 per week on ingredients. If he used his equipment and shack to process alligator tails for restaurant use, he could earn an accounting profit of $3,000 per week. What is Jeb “BBQ” Bush’s economic profit?

Explanation / Answer

Total revenue=15*5000=75000

accounting profit=3000

Economic profit=Accounting profit-implicit cost

Ecobomic profit=3000-2000=1000

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