Suppose Ernie Gives Up His Job as Financial Advisor for P.E.T.S

Multiple Choice

Suppose Ernie gives up his job as financial advisor for P.E.T.S., at which he earned $30, 000 per year, to open up a store selling spot remover to Dalmatians.He invested $10, 000 in the store, which had been in savings earning 5 percent interest.This year's revenues in the new business were $50, 000, and explicit costs were $10, 000.Calculate Ernie's economic profit.

A) $10, 000
B) $50, 000
C) $20, 000
D) $40, 000
E) $9, 500