Scenario 14-4
As part of an estate settlement Mary received $1 million. She decided to use the money to purchase a small business in Anywhere, USA. Her business operates in a perfectly competitive industry. If Mary would have invested the $1 million in a risk-free bond fund she could have earned $100,000 each year. She also quit her job with Lucky.Com Inc. to devote all of her time to her new business. Her salary at Lucky.Com Inc. was $75,000 per year.
-Refer to Scenario 14-4.What are Mary's opportunity costs of operating her new business?
A) $25,000
B) $75,000
C) $100,000
D) $175,000
Correct Answer:
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