Assuming that you currently work for a consulting firm. You are considering opening your own consulting firm, where you expect to earn RM 200,000 per year once you get established. To run his own...

Assuming that you currently work for a consulting firm. You are considering opening your own consulting firm, where you expect to earn RM 200,000 per year once you get established. To run his own firm, you would need an office and a law clerk. You have found the perfect office, which rents for RM 50,000 per year. A law clerk could be hired for RM 35,000 per year. To open your own consulting firm, you would have to quit his current job, where he is earning an annual salary of RM125,000.

1. What are your accounting costs?


2. What are your opportunity costs?

• Would your consulting firm be profitable?

1. How much would you need to make in revenues to earn Positive economic profits?