A firm produces 100 units good X. Actual money expenditure incurred on producing this good is rs 1500. the owner supplies inputs worth rs500 for which he does not receive any payment. The economic cost turned out to b rs2100. how do you account for the difference?

Answer

Economic cost (2100)
-Actual money expenditure (1500)
-Cost of inputs supplied by the owner (500)
=Nurmal profit (100)