Thomas owns and operates an Electronics and Computer shop in Los Angeles. While Thomas has a Mechanical Engineering degree and could work for CISCO Systems Corp. earning $76,000 a year his true passion is managing his own shop. Below is a list of Reggie's expenses for 2014. Use the following information to answer the questions: (show your work)
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Revenue in 2014
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$95,000
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Rent
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$15,000
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Equipment cost
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$4,200
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Supplies
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$2,750
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What is Thomas's Accounting Profit? What is Thomas's Economic Profit?
- Given Thomas's economic profit why does he still decide to manage his own shop instead of working for CISCO?