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5 August, 20:23

Dr. Khan starts his own dental practice after quitting his $150,000 job at The Mall Dental Clinic. His revenues for the first year are $500,000. He paid S90,000 în rent for the dental office, S60,000 for his office manager's salary, $24,000 for the dental hygienist, S150,000 for insurance, and S6,000 for other miscellaneous costs. The normal profit from running his business is $20,000 A) His accounting profit is $350,000 B) His economic profit is S150,000. C) His economic profit is zero. D) His accounting profit is zero.

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  1. 5 August, 20:47
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    The correct options are:

    A) His explicit costs are $330,000.

    B) His implicit costs are $170,000.

    C) Only answers A and C are correct.

    D) Answers A, B, and C are correct

    E) His economic profit is zero

    Answer

    A) His explicit costs are $330,000.

    Explanation:

    Explicit cost refers to the costs attributed to the business. They are: $90,000,+$60000+$24000+$150000+$6000 = $330000

    Implicit cost refers to opportunity cost of $150,000.

    Hence, other options are wrong, only option A is correct.
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