Andrew lives in Detroit and runs a business that sells guitars. In an average ye

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Andrew lives in Detroit and runs a business that sells guitars. In an average year, he receives $722,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $422,000; he also pays wages and utility bills totaling $268,000. He owns his showroom; if he chooses to rent it out, he will receive $2,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Andrew does not operate this guitar business, he can work as a paralegal and receive an annual salary of $21,000 with no additional monetary costs. No other costs are incurred in running this guitar business. Identify each of Andrew's costs in the following table as either an implicit cost or an explicit cost of selling guitars. Complete the following table by determining Andrew's accounting and economic profit of his guitar business. If Andrew's goal is to maximize his economic profit, he stay in the guitar business because the economic profit he would earn as a paralegal would be

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Andrew lives in Detroit and runs a business that sells guitars. In an average ye

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