Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Complete the following table by determining Dmitri's accounting and economic profit of his scooter business. Profit (Dollars) Accounting Profit Economic ProfitDmitri lives in Dallas and
Complete the following table by determining Dmitri's accounting and economic profit of his scooter business. Profit (Dollars) Accounting Profit Economic ProfitDmitri lives in Dallas and operates a small company selling scooters. On average, he receives $?19,000 per year from selling scooters. Out of this revenue from sales, he must pay the manufacturer a wholesale cost of $419,000. He also pays several utility companies, as well as his employees wages totaling $262,000. He owns the building that houses his storefront, if he choose to rent it out, he would receive a yearly amount of $19,000 in rent. Assume there is no depreciation in the value of his property over the year. Further, if Dmitri does not operate the scooter business, he can work as a blogger and earn a yearly salary of $22,000 with no additional monetary costs, and rent out his storefront at the $19,000 per year rate. There are no other costs faced by Dmitri in running this scooter company. Identify each of Dmitri '5 costs in the foiiowing table as either an impiicit cost or an expiicit cost of seiiing scooters. Implicit Cost Explicit Cost \"he wholesale cost for the scooters that Dmitri pays the manufacturer 0 0 "he wages that Dmitri pays O 0 "he rental income Dmitri could receive if he chose to rent out his showroom O O O 0 \"he salary Dmitri could earn if he worked as a blogger
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started