To open a new business, a manager must obtain a license from the city for $20,000. The
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Question:
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?
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?
Expert Answer:
The fixed costs of the company is 20000 because for the business to operate they must ob... View the full answer
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