Essay
To open a new business,a manager must obtain a license from the city for $20,000.The license is transferable,but only $3,000 is refundable in the event the firm does not use the license.
a.What are the firm's fixed costs?
Sunk costs?
b.Suppose the manager obtains a license but then decides against opening the business.If another firm offers the manager $2,000 for the license,should the manager accept the offer?
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a.Fixed costs are $20,000.Sunk costs are...View Answer
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