subject
Business, 25.03.2021 03:50 Hamadsaqer9

Edison lives in Chicago and runs a business that sells guitars. In an average year, he receives $726,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $426,000; he also pays wages and utility bills totaling $264,000. He owns his showroom; if he chooses to rent it out, he will receive $13,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Edison does not operate this guitar business, he can work as a paralegal, receive an annual salary of $22,000 with no additional monetary costs, and rent out his showroom at the $13,000 per year rate. No other costs are incurred in running this guitar business. A) Identify each of Rajiv's costs in the following table as either an implicit cost or an explicit cost of selling guitars.
Implicit Cost Explicit Cost
The rental income Darnell could receive if he
chose to rent out his showroom.
The wages and utility bills that Darnell pays.
The salary Darnell could earn if he worked as a
financial advisor.
The wholesale cost for the pianos that Darnell pays
the manufacturer.
B) Complete the following table by determining Rajiv's accounting and economic profit of his guitar business.
Profit (Dollars)
Accounting Profit
Economic Profit
C) If Darnell's goal is to maximize his economic profit, he should stay in the piano business because the economic profit he would earn as a financial advisor would be .

ansver
Answers: 1

Another question on Business

question
Business, 21.06.2019 20:30
Monetary policy in the united states is carried out primarily by which of the following agencies? a. the department of the treasury b. the small business association c. the federal reserve bank d. the u.s. mint 2b2t
Answers: 1
question
Business, 22.06.2019 15:00
(a) what was the opportunity cost of non-gm food for many buyers before 2008? (b) why did they prefer the alternative? (c) what was the opportunity cost in 2008? (d) why did it change?
Answers: 2
question
Business, 22.06.2019 16:30
Penelope summers received certain income benefits in 2018. she received $1,400 of state unemployment insurance benefits, $2,000 from a federal unemployment trust fund and $3,700 workers’ compensation received for an occupational injury. what amount of the compensation must penelope include in her income
Answers: 1
question
Business, 22.06.2019 17:00
Dan wants to start a supermarket in his hometown, and wants to get into the business only after finding out about the market and how successful his business might be. the best way for dan to gain knowledge is to:
Answers: 2
You know the right answer?
Edison lives in Chicago and runs a business that sells guitars. In an average year, he receives $726...
Questions
question
Computers and Technology, 02.06.2021 14:00
question
Mathematics, 02.06.2021 14:00
Questions on the website: 13722366