Mr. Stevens owns a building in downtown Bentonville. He has considered opening a sporting goods store in the building but has also been approached by someone who would like to rent the space to open a gym. If Mr.Stevens decides to open his sporting goods store, what is the opportunity cost of this decision? the opportunity he has to run his own business the opportunity to rent it to another tenant the property tax he would pay on the building the profits he would make from his sporting goods store

Question

Mr. Stevens owns a building in downtown Bentonville. He has considered opening a sporting goods store in the building but has also been approached by someone who would like to rent the space to open a gym. If Mr.Stevens decides to open his sporting goods store, what is the opportunity cost of this decision? the opportunity he has to run his own business the opportunity to rent it to another tenant the property tax he would pay on the building the profits he would make from his sporting goods store

Answer 1

### The opportunity to rent it to another tenant

Answer 2

## Step1: Define Opportunity Cost### Opportunity cost is the value of the next best alternative that is foregone when a decision is made.## Step2: Identify Alternatives### The alternatives are opening a sporting goods store or renting the space to another tenant.## Step3: Determine the Next Best Alternative### The next best alternative to opening a sporting goods store is renting the space to another tenant.## Step4: State the Opportunity Cost### The opportunity cost of opening the sporting goods store is the potential income from renting the space.#

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