Which of the following scenarios best illustrates the implications of negative economic profit when considering opportunity costs and explicit costs?

Negative economic profit occurs when a business's total costs exceed its total revenues, taking into account both explicit costs, like wages and rent, and opportunity costs, which are the benefits missed by choosing one option over another. For example, imagine someone who starts a bakery but spends $50,000 on ingredients and rent, and only makes $40,000 in sales. Here, the explicit costs are the $50,000, and if they could have earned $30,000 working elsewhere, the opportunity cost adds another layer. This means their total costs are $80,000 when including the missed salary, leading to a negative economic profit of $40,000. In this situation, the negative economic profit shows that the bakery is not a good choice compared to other options, highlighting the importance of considering all costs when making business decisions.