Consider Revenues and Costs in 2019 for4^thStreet Cycle, a Mississauga based bicycle company entirely owned by Mr. John Dunlop.

In-storeSales$165,000

Catalogue/Internet Sales$37,000

Labour Costs$22,000

InventoryCosts$107,000

AdvertisingCosts$16,000

Debt-Service Costs$25,000

a. What would accountants determine4^thStreet Cycle'sprofits to be in 2019?

b. Suppose Mr. Dunlop has $350,000 of capital invested in4^thStreet Cycle. Also suppose that equally risky enterprises earn an 8% rate of return on capital. What is the opportunity cost for Mr. Dunlop's capital?

c. What are theeconomicprofits for4^thStreet Cyclein 2019?

d. If4^thStreet Cycle'sprofits are typical of bicycle sellers, what would you expect to happen to this industry?