Suppose you quit your job to start a business. In the first month, your total revenue was $6,000. You paid:
$1,000 in monthly rent for office space.
$ 200 in monthly rent for equipment.
$3,000 to your workers in wages for the month.
$1,000 for the supplies you used that month.
You determine that your true profit that month was negative $200. Why?
You accounted for lost salary of $200.
You did the math incorrectly.
Your equipment rent is an implicit cost.
You accounted for lost salary of $1000.