You have been working as a manager of fashion store. During your work you have saved $50,000. You decided to use the money you saved to start your own business. You decided to use the money you saved to buy the materials. You also decided to utilize a store you own to home your business. The store you used for your business could have been rented for $8,000 a year. You hired a clerk to help you in the store that will cost $20,000 per year. The interest you could have earned on the $50,000 you used to buy the materials was $3,000 per year. Furthermore, you decided to manage your own business and you decided to quit your job that was paying $28,000 per year. You paid $8,000 for utility. What is your explicit cost? Assume that your total sale for the year was $160,000. What is your implicit cost, what is the accounting profit? What is your economic profit?

State the relationship between average product (AP)and marginal profit (MP) when

1.AP is increasing, is AP above (greater), below (less) or equal to MP? ________ chose one

2.AP is decreasing, is AP above, less or equal to MP? _________ choose one

3.AP is maximum, Is AP above, less of equal to MP? _____________ choose one

State the relationship between average variable cost (AVC), and marginal cost (MC) when

1.AVC is decreasing, is AVC is above (greater), equal, or less (below) than MC? ________ choose one

2.AVC is minimum, is AVC is above, equal or less than MC? __________ choose one

3.AVC is increasing, is AVC is above, equal, or less than MC? _________ choose one