Gomez runs a small pottery firm. He hires one helper at $12000 per year,pays annual rent $5000 for his shop, and spends $20000 per year on materials. He has $40000 of his own funds invested in equipment (pottery wheels, kilns and so forth) that could earn him interest rate 10% annually if alternatively invested. He has been offered $15000 per year to work as a potter for competitor. Total revenue from pottery sales is $72000
Calculate accounting cost, economic cost, accounting profit, economic profit for Gomez pottery firm, should Gomez stay in the pottery business or not? Explain