C) $77,000. D) $92,000. Question 16 (1 point) Ralph owns a small pizza restauran

Question

C) $77,000. D) $92,000. Question 16 (1 point) Ralph owns a small pizza restaurant, where he works full-time in the kitchen. His total revenue last year was $100,000, and his rent was $3,000 per month. He pays his one employee $2,000 per month, and the cost of ingredients and overhead averages $500 per month. Ralph could earn $35,000 per year as the manager of a competing pizza restaurant nearby. His total implicit costs for the year were: A) $101,000. B) $35,000. C) $72.000. D) $66,000. ved MacBook Air 1 4 2

Explanation / Answer

16. Ans : B ) $ 35000

Explanation :

Implicit cost means an oppertunity cost of the resources in its next best alternative uses.It is an oppertunity costs of using resources supplied by the factors itself.

Ralph earns ( profit ) in its own small piza restaurant for the year = $34000 [( $100000 - ($3000*12) - ( $2000 *12 ) - ( $500 *12)

So it is cleared that Ralph's total implicit cost will be $35000 .

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