Entrepreneurs in the shoeshine stand earn $20,000 a year.
Joe pays the rent of $2,500 a year, and his total revenue is $21,000 a year.
He borrowed $1,200 at 10 percent a year to buy equipment.
At the end of one year, Joe was offered $1,100 for his business and all its equipment.
What is the explicit cost?
What is the implicit cost?
What is Joe economic profit in the first year?