Antonio lives in San Francisco and runs a business that sells boats. In an average year, he receives $722,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $422,000; he also pays wages and utility bills totaling $268,000. He owns his showroom; if he chooses to rent it out, he will receive $2,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Antonio does not operate this boat business, he can work as a paralegal, receive an annual salary of $21,000 with no additional monetary costs, and rent out his showroom at the $2,000 per year rate. No other costs are incurred in running this boat business.

Identify each of Carlos's costs in the following table as either an implicit cost or an explicit cost of selling pianos.

a. The rental income Carlos could receive if he chose to rent out his showroom
b. The wages and utility bills that Carlos pays
c. The wholesale cost for the pianos that Carlos pays the manufacturer
d. The salary Carlos could earn if he worked as a paralegal

explicit cost is the actual cost incurred in carrying out a particular action. It usually involves money outflow. It includes rent , wages, utility bills

Implicit cost or opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives. It is considered when calculating economic profit

By choosing yo make use of the showroom, he is forgoing the opportunity to earn rent. Thus the rent he could have earned is his opportunity cost. Also, if Carlos didn't start his business, he could have been working as a paralegal. By starting his business, he forgoed the opportunity to earn income. The income he forgoed is his opportunity cost