Calculate accounting profit and economic profit

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Reference no: EM131081772

Suppose Charlie Brown opens a lemonade stand. He hires Linus and Lucy for $12 a week ($6 each). He "rents" pitchers and spoons from his mother for $5 a week and spends $20 a week on paper cups, lemons, sugar, and other materials. Before he opened the stand, he was earning $15 a week selling newspapers. He grosses $72 in revenues a week from lemonade sales. Calculate accounting profit, and economic profit. Evaluate how Charlie's lemonade business is doing. Is he using his resources efficiently?

Reference no: EM131081772

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