Andrew decides to open a tattoo parlour in his basement and quits his job at TD Securities, sacrificing an annual salary of $64,000. Andrew will have to evict his tenant who currently pays $16,000 a year to rent the basement. Andrew's implicit cost of opening the tattoo parlour is $80,000.

Question

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The implicit cost includes both the foregone salary of $64,000 and the lost rental income of $16,000, totaling $80,000.

Andrew Decides to Open a Tattoo Parlour in His Basement