Dana spends $10,000 on remodeling a storefront that she then opens as a shoe store. The business has not been very successful, and she needs an additional $3,000 to keep the shoe store open. Which of the following is true?
A) The $10,000 Dana spent on remodeling represents a part of the total variable cost of her business.
B) The $3,000 represents her marginal costs of production.
C) The $10,000 Dana spent on remodeling is a fixed cost of her business.
D) The $3,000 Dana needs to keep the deli open represents her total fixed costs.

Question

Quizplus · Accepted Answer

The $10,000 Dana spent on remodeling is a fixed cost because it is a one-time expense that does not change with the level of output or sales in her business.

Dana Spends $10,000 on Remodeling a Storefront That She Then