Answer
Explicit costs= 37,000
Implicit costs= 22,000
Accounting profit = 35,000
Economic profit = 13,000
Work Step by Step
We find:
Explicit costs= 12,000 for the helper + 5,000 of rent + 20,000 of materials
= 37,000
Implicit costs = 4,000 of forgone interest + 15,000 of forgone salary + 3,000 of entrepreneurship
=22000
Accounting profit = 72,000 of revenue - 37,000 of explicit costs
=35000
Economic profit = 72,000 - 37,000 of explicit costs - 22,000 of implicit costs.
=13000.
