Mangerial Economics 640

640 BUS Managerial economics 1. Title probability basis When Burton e. e. cummings graduated with honors from the Canadian Trucking Academy, his father gave him a $350,000 tractor-trailer frame. Recently, Burton was boasting to some match truckers that his revenue enhancements were typically $25,000 per schedule month, while his run be (fuel, maintenance, and depreciation) amounted to only $18,000 per month. Tractor-trailer rigs identical to Burtons rig rent for $15,000 per month. If Burton was drive trucks for superstar of the competing truck firms, he would grasp $5,000 per month. Burton is proud of the feature that he is generating a net notes flow of $7,000 ($25,000 $18,000) per month, since he would be earning only $5,000 per month if he were working for a trucking firm. reckon both Burton e. e. cummingss open cost per month and his silent be per month. Explicit be are defined by Thomas and Maurice (2011) as the fiscal fortune cost of utilise market-supplied resources (p 9). Burton cummings explicit costs are $18,000. In addition, unquestioning costs are $7,000 (revenue in operation(p) costs). Thomas and Maurice reap these costs as nonmonetary hazard costs of using owner-supplied resources (2011, p 9). Compute the prospect cost of the resources calld by Burton Cummings each month.

Opportunity costs are set forth by Thomas and Maurice as what a firms owners give up to use resources to produce goods or services (2011, p 8). Burton Cummings opportunity costs each month are $13,000. He currently nets $7,000 (revenue expense) and he has an opportunity to net $20,000 ($5,000 salary + $15,000 rental income + 0 expenses = $20,000. What advice would you give Burton Cummings? Explain your advice in terms of opportunity costs. I would offer Burton Cummings to remain use and pitch in a salary. This income, coupled with the rental income from rent break his tractor-trailer will bugger off in substantially higher(prenominal) revenue because he has cypher payout for operating costs (since his...If you neediness to accept a complete essay, order it on our website: Ordercustompaper.com

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