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extrl83 extrl83
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Situation 22-4

Joe is the owner-operator of Joe's Haircuts Unlimited. Last year he earned $200,000 in total revenues and paid $125,000 to his employees and suppliers. During the course of the year, he received three offers to work for other barbers, with the highest offer being $50,000 per year.

Refer to Situation 22-4.  Is Joe earning a normal profit?



▸

No, he is earning an above-normal profit.



▸

No, but he is earning an accounting profit and that is all that matters.



▸

Yes, but his economic profit is $0 and that is not good.



▸

We cannot be sure, because "normal" profit is a subjective judgment.



▸

No, his economic profit is negative.

Textbook 
Economics

Economics


Edition: 12th
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dm408dm408
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No, he is earning an above-normal profit.
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