A company has a total revenue of $500,000 for the year. The explicit costs associated with running the business amount to $300,000. If the owner estimates that the opportunity cost of their time and investment is $100,000, what is the economic profit of the business?

To find the economic profit of the business, we first need to understand the concept of economic profit. Economic profit takes into account both explicit costs, which are the direct costs of running the business, and implicit costs, which represent the opportunity costs of the owner's time and investment. In this case, the company's total revenue is $500,000, and the explicit costs are $300,000. Additionally, the owner estimates an opportunity cost of $100,000. To calculate the economic profit, we subtract both the explicit costs and the opportunity costs from the total revenue: $500,000 - $300,000 - $100,000, which equals $100,000.