 Zane owns a coffee shop in his small town and he loves his work. His special secret blend has made his coffee the best in the state for decades and has made his shop a popular meeting spot and a source of pride for the local community. Zane knows he must make a profit if he wants to continue to brew his special coffee blend. He decides to set up a meeting with his accountant, Abby. Abby calculates Zane's total accounting profit, his total revenue minus his total tangible cost. First she determines his revenue from coffee and food sales. Then she tallies up his tangible costs, things like coffee beans, wages for the baristas, taxes and insurance. Abby finds that Zane's total profits come to $35,000, which he claims is a salary. This financial calculation is called accounting profit. Later that month, Zane received a call from a large corporation asking him to manage a coffee shop in the next town for $45,000 a year. An additional $10,000 a year is enticing, but Zane must first consider his opportunity cost or what he would give up if he chose to accept the position. Opportunity cost is not always represented in cash because often other factors like job satisfaction, time commuting or sense of community cannot always be explicitly calculated. Zane needs to go beyond accounting profit to help him make this decision. He will have to think about the daily benefits of his job to decide whether the higher salary justifies transition. He can calculate the accounting profit of the corporate job by subtracting his current salary, which is $35,000 from his job offer of $45,000. To arrive at his economic profit Zane needs to decide how much the emotional extras from running his own business are or as we put it earlier the opportunity cost. If Zane values the extras at $10,000 then he will have a zero economic profit. In a perfectly competitive market this would be called a normal profit because his resources are being efficiently used relative to his other option. In this scenario Zane would be indifferent between choosing the new job or operating his coffee shop. If Zane values the worth of the extras at less than $10,000 then he will have a negative economic profit for his shop. His economic profit would be below normal in a perfectly competitive market. This means that he would take the new job offer and close the shop. If Zane values the extras at more than $10,000 then he will have a positive economic profit at his shop. This means that he would continue to own his coffee shop and his economic profit would be above normal in a perfectly competitive market. Of course, it is difficult to put a financial value on things like autonomy or community and Zane admits that having some extra money would be nice. After careful consideration, however, Zane valued his opportunity cost at more than $10,000. He enjoys the independence and flexibility of being his own boss, the convenience of working in his own town, and the ability to keep his special secret recipe in the family. Abby and the rest of the town's people were happy too because it appears that their beloved local coffee shop is there to stay.