Nick lives in Philadelphia and runs a business that sells guitars. In an average year, he receives $725,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $425,000; he also pays wages and utility bills totaling $265,000. He owns his showroom; if he chooses to rent it out, he will receive $1,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Nick does not operate this guitar business, he can work as a financial advisor, receive an annual salary of $45,000 with no additional monetary costs, and rent out his showroom at the $1,000 per year rate. No other costs are incurred in running this guitar business.

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

	Implicit Cost	Explicit Cost
The wholesale cost for the guitars that Nick pays the manufacturer
The salary Nick could earn if he worked as a financial advisor
The wages and utility bills that Nick pays
The rental income Nick could receive if he chose to rent out his showroom

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

	Profit
(Dollars)
Accounting Profit
Economic Profit