Lorelai purchases an inn in 2004 for $200,000. Today (2016) if she wants to operate it as a bed and breakfast she would have to pay her cook $25,000/year, her assistant manager $50,000/year, and $10,000 in electric bills. Alternatively, she could could sell the inn to a large corporate hotel chain for $300,000. A second option would be to donate it to the local historical society; as a gesture of gratitude they would build a statue of her on the town square, which she would value at $25,000

a) What are the explicit costs of operating the bed and breakfast?

b) What are the accounting costs of operating the bed and breakfast?

c) What are the economic costs of operating the bed and breakfast?