When people go into business they must consider several economic aspects, including cost factors. We've seen how a firm could be earning an accounting profit, but losing money in an economic sense. This highlights how the concepts of explicit and implicit costs are central to the idea of profit.
For this discussion, answer the following questions:
- What would be some of the fixed costs associated with producing the product?
- What kinds of variable costs would you have to consider?
- What would be some of the implicit costs associated with starting your own company?
- How do these considerations relate back to the three basic economic questions you've learned about? (Three questions businesses should answer)