Jane Doe has her own law practice.She pays $1,500 in rent for her offices per month.She also pays $4,000 a month in salaries to secretaries and staff,utility bills worth $500 a month,and miscellaneous bills worth $1,000 a month.She recently received an offer to work for a legal firm for $8,000 a month,but she declined that in order to run her own practice.Which of the following most completely describes the cost Jane incurs per month to run her own practice?

Question

Quizplus · Accepted Answer

Jane's explicit costs are $1,500 (rent) + $4,000 (salaries) + $500 (utilities) + $1,000 (miscellaneous) = $7,000. The opportunity cost of not taking the $8,000 job offer is also a cost, making the total cost $7,000 + $8,000 = $15,000.

Jane Doe Has Her Own Law Practice