Answer:
Implicit cost
The salary Manuel could earn if he worked as a financial advisor
b. The rental income Manuel could receive if he chose to rent out his showroom
explicit cost
c. The wholesale cost for the pianos that Manuel pays the manufacturer
d. The wages and utility bills that Manuel pays
Explanation:
Explicit cost includes the amount expended in running the business. They include rent , salary and cost of raw materials.
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
Only explicit cost is considered when calculating accounting profit while both explicit and implicit costs are considered in calculating economic profit.
Accounting profit= total revenue - explicit cost
Economic profit = accounting profit - implicit cost
If Manuel did not sell pianos, he would be working as a financial advisor, this is his next best option. Thus the salary he would have earned as a financial advisor is his explicit cost
If he did not use the showroom, he could have rented it out. Renting it out is his next best option. Thus the income from renting the showroom is his explicit cost
The wholesale cost of the pianos, wages and utility bills are monies actually expended in the course of running the business. Thus they are explicit costs
