Hubert lives in Detroit and runs a business that sells boats. In an average year, he receives $851,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $476,000; he also pays wages and utility bills totaling $281,000. He owns his showroom; if he chooses to rent it out, he will receive $71,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Hubert does not operate this boat business, he can work as an accountant, receive an annual salary of $34,000 with no additional monetary costs, and rent out his showroom at the $71,000 per year rate. No other costs are incurred in running this boat business.

Identify each of Hubert's costs in the following table as either an implicit cost or an explicit cost of selling boats.

	Implicit Cost	Explicit Cost
The salary Bob could earn if he worked as an accountant
The wholesale cost for the boats that Hubert pays the manufacturer
The rental income could receive if he chose to rent out his showroom
The wages and utility bills that pays

Complete the following table by determining Hubert's accounting and economic profit of his boat business.

	Profit
	(Dollars)
Accounting Profit
Economic Profit

Answer rating: 100% (QA)

From the information given The total revenue from selling boats 851000 Payment made as w... View the full answer