Cost-benefit analysis

Le wants to open a Cajun-Vietnamese fusion restaurant. He currently works as a software engineer and earns

$ 90,000

per year. He estimates the operating costs for the restaurant, such as the cost of labor and materials, at

$ 60,000

. He also estimates he will have

$ 100,000

in revenues from operating the restaurant.

Which of the following statements is true based on Le’s estimates?

(Choice A)
As long as his revenues are higher than $$ 60,000$ ‍, it is rational to open this restaurant.
(Choice B)
He should subtract his explicit costs from his foregone earnings when comparing his revenues to his costs.
(Choice C)
He should consider both his foregone earnings and the explicit costs when comparing his revenues to costs.
(Choice D)
He should only consider his foregone earnings when comparing his revenues to costs.
(Choice E)
He should only consider the explicit costs of operating the restaurant when comparing his revenues to costs.

AP®︎/College Microeconomics