Key objective:designing framework for business decision-making with the opportunity cost and the marginal cost consideration.

Setting:You are one of a few co-owners of a commercial space of 50,000 sq. ft. in the building in downtown Albany, New York. You have to come to a common decision like economists what to do with it now. Some of you run own private single-owned businesses and might find this space useful for your own purpose. So far, you have invested $20,000.00 in the renovation of the building. You have to motivate your decision based on the principles of economics.

Instruction:Have in mind current market conditions. Use formal language and correct terminology in your discussion of relevant economic concepts, and apply relevant economic tools for problem solving in this real-life imitating simulation. As there might be differences in opinions please support your proposal in the assignment with supporting data and include also one-page memo presenting the summary of your recommendation, the way of your thinking adopted, and the decision to be agreed upon. Some extra research would be helpful. You can adopt a real or a mock example if want to work with more details.

Outline:Consider and discuss in the assignment, the issues in your decision making process as follows with specific mock projections and analysis of the current market:

assumptions

trade-offs, values and incentives - leasing space versus using for own business ventures

rational choice

marginal changes

sunk costs

opportunity cost

factors of production

market forces: demand and supply, market equilibrium

possible externalities

economic variables that can influence your choice

business cycle

please apply economic models.