The Cost of Building Garages at a New Development Is

question 4

Short Answer

The cost of building garages at a new development is $10,500 per garage. If a subcontractor builds five and then sells four at $12,500 each to the developer, how much does the subcontractor now have invested?

---

Definitions:

Explicit Costs

The direct payment made to others in the course of running a business, such as wages, rent, and materials.

Implicit Costs

Implicit costs are the opportunity costs associated with a company's use of internal resources that could have been utilized elsewhere, not directly paid out in cash.

Economic Costs

The total cost of choosing one action over another, including both explicit costs (direct outlays) and implicit costs (opportunity costs).

Entrepreneur's Talent

The unique set of skills, knowledge, and intuition that an entrepreneur possesses, enabling them to identify, evaluate, and exploit business opportunities.