Question: Your aunt is thinking about opening a hardware store. She estimates that it would cost $500 000 per year to rent the location and buy

 Your aunt is thinking about opening a hardware store. She estimates

Your aunt is thinking about opening a hardware store. She estimates that it would cost $500 000 per year to rent the location and buy the supply of merchandise. In addition, she would have to quit her $50 000 per year job as an accountant. Calculate your aunt's opportunity cost and categorize them as explicit and implicit costs of running a hardware store for a year. (2 points) . If your aunt thought she could sell $510 000 worth of merchandise in a year (her total revenue). should she open the store? Explain briefly and in the context of Economic Profits vs. Accounting Profits. (2 points), remember that these two types of profit measures are used for different purposes

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!