Suppose Natasha currently makes $50,000 per year working as a manager at a cable TV company. She

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Suppose Natasha currently makes $50,000 per year working as a manager at a cable TV company. She then develops two possible entrepreneurial business opportunities. In one, she will quit her job to start a n organic soap company. In the oth er, she will try to develop an I nternet-based competitor to the local cable company. For the soap-making opportunity, she anticipates annual revenue of $465,000 and costs for the necessary land, labor, and capital of $395,000 per year. For the Internet opportunity, she anticipates costs for land, labor, and capital of $3,250,000 per year as compared to revenues of $3,275,000 per year. 

(a) Should she quit her current job to become an entrepreneur? 

(b) If she does quit her current job, which opportunity would she pursue?

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Microeconomics Principles, Problems and Policies

ISBN: 978-1259450242

20th edition

Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn

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