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Denaro pays $8,000 per month in rent to operate a health club in Memphis. He also pays $17,000 per month in wages, $3,000 per month in food and supplies, and $1,000 per month in insurance. All of his costs of production can change except his insurance and rent. Denaro's sunk costs equal:______

Respuesta :

jepessoa

Answer:

$9,000

Explanation:

Sunk costs are costs that cannot be recovered, and in this case, Denaro's rent and insurance expense are considered sunk costs because they are generally paid when the month is starting and they cannot be recovered or changed afterwards. Denaro can vary the other monthly costs, e.g. he can decide to shut down and not spend any more food or supplies.  

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