You own and operate a bike store. each year, you receive revenue of $200,000 from your bike sales, and it costs you $100,000 to obtain the bikes. in addition, you pay $20,000 for electricity, taxes, and other expenses per year. instead of running the bike store, you could become an accountant and receive a yearly salary of $40,000. a large clothing retail chain wants to expand and offers to rent the store from you for $50,000 per year. how do you explain to your friends that despite making a profit, it is too costly for you to continue running your store?
(a) find your accounting profit.
(b) find your economic profit.
(c) explain your decision.
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