Answer to Question #67674 in Microeconomics for alexis

Question

Suppose she opens her shop in a building she owns, which she could be renting out to someone else for $1,000 a month. In addition, A to Z Rental required her to sign a one year lease on the coolers needed for her shop and the rent is $200 a month. Hiring three assistants costs her $1,800 a month. Finally, the flowers, vases and other material needed for making flower arrangements average $5,000 a month. What is her long run fixed cost?

Answer 1

Long run cost in such way is rent of coolers and equal to $200 per month. Assistants and other materials are variable in long run because if she decides to develop business she would require more of that resources.