14. Tara is considering leaving her current job, which pays $56,000 per year, to starta new company that manufactures a line of special pens for personal digitalassistants. Based on market research, she can sell about 160,000 units during thefirst year at a price of $20 per unit. With annual overhead costs and operatingexpenses amounting to $3,160,000, Tara expects a profit margin of 25 percent.This margin is 6 percent larger than that of her largest competitor, Pens, Inc.a. If Tara decides to embark on her new venture, what will her accountingcosts be during the first year of operation? Her implicit costs? Heropportunity costs?b. Suppose that Tara's estimated selling price is lower than originallyprojected during the first year. How much revenue would she need in orderto earn positive accounting profits? Positive economic profits?

Answered: Image /qna-images/answer/a328cf8b-2667-4092-963c-83ec9e3cb0ed.jpg

Answered: 14. Tara is considering leaving her…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.6P

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