Question

Krista sets up a business selling coffee from a coffee cart. She earns $12,000 in revenue a month. She incurs costs of $3000 per month in supplies (coffee cups, creamer, sugar, pastries, napkins, and so on). She used to earn $3500 per month as a barista. The coffee cart is very specialized and has no other uses. What is Krista's implicit cost of capital per month?

Answer 1

Answer:

$3,000 per month

Explanation:

If an owner paid himself or a business paid to his owner this type of cost referred to as implicit cost.

In the case of Krista, she is an owner of a business of selling Coffee and also works at her business place as a barista and paid herself $3,000 per month.

So, $3,000 paid as a barista to her self called Implicit cost for the business.