What is the economic cost of this business?

Question

Pete left a job paying 50,000 a year to start his own business in a building he owns . Similiar buildings rent for $10,000 a year. Pete pays employees $75,000 and paid $150,000 for supplies. What are the economic cost of his business?

Answer 1

as stated by the previous answer economic cost includes opportunity costs which would include the 50,000 salary as well as the 10,000 in rent that that Pete has forgone to pursue this entrepreneurial venture. When you add the costs together it comes to a total economic cost of $285,000

Answer 2

Economic costs include opportunity costs, which are the trade-offs, the best alternative that one gives up for the sake of pursuing a course of action.