Question

A young chef is considering opening his own sushi bar. To do so, he would have to quit his current job, which pays $20,000 a year, and take over a store building that he owns and currently rents to his brother for $6,000 a year. His expenses at the sushi bar would be $50,000 for food and $2,000 for gas and electricity. What are his explicit costs?

Answer 1

total explicit cost 52,000

Step-by-step explanation:

The explicit cost are the cost asociate with the activity, which are the 50,000 expenses and the 2,000 on utilities.

total explicit cost 52,000

Renounce to his current job of 20,000

and use the rental space which currently yields 6,000

are the opportunity cost of the project and are using to calculate the economic profit.