Tina withdraws $20,000 from her money market account to start up her own house cleaning business. Over that time, the account would have earned 3 percent interest. In order to properly account for all costs of her business, Tina must not forget:

Question

Quizplus · Accepted Answer

The opportunity cost of withdrawing $20,000 from an account that would have earned 3 percent interest is the interest she would have earned, which is $20,000 * 0.03 = $600. Fixed costs refer to expenses that do not change with the level of output and are not relevant in this context.

Tina Withdraws $20,000 from Her Money Market Account to Start