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The Sweet Success Bakery sells 500 cakes at a price of $10 per cake. Its total economic costs for producing 500 cakes are $500.

What are The Sweet Success Bakery's economic profits?

Answer :

Final answer:

The Sweet Success Bakery's economic profits are $4500.

Explanation:

To calculate the economic profits for The Sweet Success Bakery, we need to subtract the economic costs from the total revenue. The total revenue can be calculated by multiplying the number of cakes sold (500) by the price per cake ($10). In this case, the total revenue is $5000 (500 cakes * $10 per cake).

The economic costs for producing 500 cakes are given as $500. These costs include both explicit costs (such as the cost of ingredients, labor, and utilities) and implicit costs (such as the opportunity cost of using the bakery owner's time and resources).

To find the economic profits, we subtract the economic costs ($500) from the total revenue ($5000). The calculation is as follows:

Economic Profits = Total Revenue - Economic Costs

Economic Profits = $5000 - $500

Economic Profits = $4500

Therefore, The Sweet Success Bakery's economic profits are $4500.

Learn more about calculating economic profits for a bakery here:

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