John McAuley, a lawyer working for a large law firm and earning $60,000 per year, i contemplating giving up hi job and etting up hi own law practice. He etimate that renting an office would cot $10,000 per year, hiring a legal ecretary would cot $20,000 per year, renting the required office equipment would cot $15,000 per year, and purchaing the required upplie, paying for electricity, telephone, etc. Would cot another $5,000. The lawyer etimated that hi total revenue for the year would be $100,000, and he i indifferent between keeping hi preent occupation with the large law firm and opening hi own law office. A. How much would be the explicit cot of the lawyer for running hi own law office for the year? b. How much would the accounting cot be? The implicit cot? The economic cot? c. Should the lawyer go ahead and tart hi own practice?
