Kyle is a college student who owns a painting business during the summer. He earns $4,000 in revenues from his paining business and he spent $1,000 in painting supplies. He also worked last summer at a paint store as a manager earning $2,500.Please answer questions 3a through 3d
a. What is Kyle's accounting profit? Please show all calculations and work.
b. What is Kyle's economic profit? Please show your calculations and work. Based on his economic profit and accounting profit calculations, should Kyle continue running his painting business this summer or go back to work at his managing job at the paint store? Why?
c. Is Kyle’s economic profit higher or lower than his accounting profit? Explain why his economic profit is higher or lower than his accounting profit.
d. Has Kyle earned a normal profit? Explain why or why not.