The Value of Currently Unused Warehouse Space That Will Be

question 73

Multiple Choice

The value of currently unused warehouse space that will be used as part of a new capital budgeting project is:

• A)an opportunity cost.
• B)irrelevant to the investment decision.
• C)an overhead expense.
• D)a sunk cost.

---

Definitions:

Equilibrium

When aggregate demand equals aggregate supply.

MC = MR

A principle in economics stating that profit maximization occurs when a firm's marginal cost (MC) equals its marginal revenue (MR).

Marginal Revenue

The additional income gained from selling one more unit of a good or service.

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.