Gerald was offered a spot in the family business, where he would have earned \$100,000 per year. Instead, he has gone into business for himself, selling coffee mugs.
Every year, he is able to sell 50,000 mugs at a price of \$4 apiece. To make the mugs, he bears some costs:
\$60,000 in labor costs
\$10,000 in machine repair
\$40,000 to pay licencing fees to make mugs for popular cartoon characters