Chapter 2
Q. 2.4
An importer rents a building for storage. The rental cost is $2,000 per month. Presently, the importer occupies only half of the building space. She could sublet the remaining space for $600 per month. She is considering a new line of products to import that would use the remaining space. What is the opportunity cost of using the building to add the new line of products?
Step-by-Step
Verified Solution
The opportunity cost is the forgone opportunity to sublet the remaining space, or $600 per month.