Sonya purchased a tract of land for $100,000. She quit her $30,000-a-year job as a postal employee and opened a skeet shooting range on her land. The range generates $100,000 in revenues each year. She spends $40,000 a year in employee salaries, $20,000 a year in ammunition and supplies for the skeet shooting, and $10,000 in office supplies. Assume that the relevant interest or discount rate is 10 percent
- What is Sonya's accounting or business profit? Explain.
- What is Sonya's economic profit? Explain.
- Assuming that Sonya is indifferent between working as a postal employee and owning a skeet shooting range, should Sonya continue owning the skeet shooting range? Why?