Question

Suppose the extra cost to a doctor of keeping his office open on Saturdays is $1200. Then, the doctor should stay open on Saturdays if keeping the office open brings an additional revenue of $1200 or more (T/F)

Answer 1

If the additional revenue is greater than the explicit and implicit costs combined, the doctor should stay open on Saturdays.

Step-by-step explanation:

To determine whether the doctor should stay open on Saturdays, we need to compare the extra cost of keeping the office open with the additional revenue it brings. If the extra cost is $1200 and keeping the office open brings an additional revenue of $1200 or more, then the doctor should stay open on Saturdays.

However, it is important to consider both explicit and implicit costs. Explicit costs are the actual expenses incurred, such as the extra cost of keeping the office open. Implicit costs are the opportunity costs, such as the potential income the doctor could earn by doing something else.

In this case, if the additional revenue of $1200 or more is greater than the explicit and implicit costs combined, then the doctor should stay open on Saturdays.