Final answer:
To calculate if opening a legal practice is profitable, total explicit costs of $85,000 for office rental and law clerk's salary are subtracted from expected revenue of $200,000, giving an accounting profit of $115,000. Implicit costs also need to be considered for a full profitability analysis.
Step-by-step explanation:
The question appears to center around whether opening a legal practice would be profitable for an individual currently working at a corporate law firm, with specific considerations of explicit costs such as office rental and a law clerk's salary. To determine profitability, one must first calculate the total explicit costs, which in this example, includes a $50,000 office rental fee and a $35,000 salary for the law clerk, summing up to $85,000. Next, this total cost is subtracted from the expected revenue of $200,000. Assuming these are the only costs, the accounting profit would be the difference of $115,000. However, for a comprehensive profitability analysis, one should also consider implicit costs, including opportunity costs and any other non-explicit costs.