Question
Arissa was earning $150,000 a year working as a pharmacist for a drug company. She decided to start her own business that conducted drug trials.
Arissa was earning $150,000 a year working as a pharmacist for a drug company. She decided to start her own business that conducted drug trials. She estimates this entrepreneurial talent or forgone entrepreneurial income to be $20,000 a year. She used $250,000 in savings that earned 10 percent interest annually to finance the new business. In the first year, the firm earned revenue of $1,000,000. The costs for rent, supplies, and employees' salaries were $800,000.Calculate:(Show workings) i) Explicit cost, ii) Implicit cost, iii) Economic cost, iv) Accounting profit, v) Economic profit
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