Definition of economic costs

Manuel lives in Denver and operates a small company selling bikes. On average, he receives $$833,000$ per year from selling bikes. Out of this revenue from sales, he must pay the manufacturer a wholesale cost of $$464,000.$ He also pays several utility companies, as well as his employees wages totaling $$278,000.$ He owns the building that houses his storefront; if he choose to rent it out, he would receive a yearly amount of $$68,000$ in rent. Assume there is no depreciation in the value of his property over the year. Further, if Manuel does not operate the bike business, he can work as a programmer and earn a yearly salary of $$34,000$ with no additional monetary costs, and rent out his storefront at the $$68,000$ per year rate. There are no other costs faced by Manuel in running this bike company.

Identify each of Manuel's costs in the following table as either an implicit cost or an explicit cost of selling bikes.

$\backslash$table$[[$The salary Manuel could earn if he worked as a programmer$],[$The wages that Manuel pays$],[$The wholesale cost for the bikes that Manuel. pays the manufacturer$],[$The rental income Manuel could receive if he chose to rent out his showroom$]]$

Complete the following table by determining Manuel's accounting and economic profit of his bike business.

Profit

$($Dollars$)$

Accounting Profit

Economic Profit