v 4Dashboard - Antelope Valley Cc x | Homework (Ch 06) MindTap - Cengage Learning X New Tab X @ ng.cengage.com/staticb/ui/evo/index.html? deploymentld=5839622340537210505082758348&eISBN=9781337111560&id=1995945205&snapshotld=3812144& Q * CENGAGE | MINDTAP Q Search this course ? Homework (Ch 06) X 1. Costs and profit Gilberto lives in Detroit and runs a business that sells pianos. In an average year, he receives $793,000 from selling pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $430,000; he also pays wages and utility bills totaling $301,000. He owns his showroom; if he chooses A-Z to rent it out, he will receive $15,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Gilberto does not operate this piano business, he can work as a financial advisor and receive an annual salary of $50,000 with no additional monetary costs. No other costs are incurred in running this piano business. SI Identify each of Gilberto's costs in the following table as either an implicit cost or an explicit cost of selling pianos. Implicit Cost Explicit Cost The wholesale cost for the pianos that Gilberto pays the manufacturer C O bongo The rental income Gilberto could receive if he chose to rent out his showroom O O The salary Gilberto could earn if he worked as a financial advisor O O The wages and utility bills that Gilberto pays O O 2 Complete the following table by determining Gilberto's accounting and economic profit of his piano business. Profit (Dollars) Accounting Profit Economic Profit Alternatively, the economic profit he would earn as a financial advisor would be S If Gilberto's goal is to maximize his economic profit, he stay in the piano business. True or false: Gilberto is earning a normal profit. O False O True Grade It Now Save & Continue Continue without saving