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Evaluating Business Viability
A friend who is not an economist tells you, 'As long as my business's total sales are greater than my out-of-pocket expenses like rent and materials, I'm making a real profit and it makes sense to keep the business running.' Analyze this statement. In your response, explain the difference between the type of profit your friend is describing and the type of profit an economist would calculate. Provide a clear example of a cost your friend is likely ignoring and discuss how including that cost could change the conclusion about whether it 'makes sense to keep the business running'.
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Science
Economy
CORE Econ
Social Science
Empirical Science
Economics
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
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