Your uncle is thinking about opening a wine bar. He estimates that it would cost $400000 per year to rent the location and buy the stock. In addition he would have to quit his $120000 per year job as an accountant. Suppose your uncle thought he could sel S600000 worth of wine in a year. Which statement is true? His economic profit is $80000 which is less than he earns as an accountant so he should not open the wine bar Total cost of running the wine bar is $400000 and he should open the store since his economic profits would be $180000. Total cost of running the wine bar is 5520000 and he should open the bar since his economic profits will be positive. His accounting profits are 580000 which is stil enough to make it worch opening the wine bar

Your uncle is thinking about opening a wine bar. He estimates that it would cost $400000 per year to rent the location and buy the stock. In addition he would have to quit his $120000 per year job as an accountant. Suppose your uncle thought he could sel S600000 worth of wine in a year. Which statement is true? His economic profit is $80000 which is less than he earns as an accountant so he should not open the wine bar Total cost of running the wine bar is $400000 and he should open the store since his economic profits would be $180000. Total cost of running the wine bar is 5520000 and he should open the bar since his economic profits will be positive. His accounting profits are 580000 which is stil enough to make it worch opening the wine bar

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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