Answer:
Economic profit =$43,000
Explanation:
Accounting profit is the difference between revenue from from production or service activities and the expenditures incurred.
On the other hand, economic profit includes accounting profit plus opportunity cost. Opportunity cost is the value of the benefits sacrificed in favour of a decision.
For example, the salary of $50,000 forfeited by Harvey in favor of his decision to become an entrepreneur is an example of opportunity cost
Economic profit = Accounting profit- opportunity cost
Accounting profit = Revenue - cost
Accounting profit = 130,000 - (20,000 + 17,000) = 93,000
Economic profit = 93,000 - 50,000 =$43000
Economic profit =$43,000
