Question

Rob quit a job working 20 hours per week at a Subway sandwich shop to make sandwiches in his college dorm room that he sells to hungry students. If he had been paid $9 per hour at Subway and now works the same 20 hours per week but sells his sandwiches for $300 per week and pays only $100 per week for the supplies, how much economic profit does he make?

Answer 1

Answer:

$20

Explanation:

300 - 100 = 200

He used to earn: 9×20 = 180

Economic profit = 200 - 180 = 20

Answer 2

Answer:

It is economically profitable to make the sandwiches in his dorm.

Explanation:

Giving the following information:

Subway income= 20hours* $9= $180

Now, he works the same 20 hours per week but sells his sandwiches for $300 per week and pays only $100 per week for the supplies.

The economic profit includes the opportunity cost of working on Subway.

Economic profit= 300 - 100 - 180= $20

It is economically profitable to make the sandwiches in his dorm.