Alicia Spends $20,000 on Remodeling a Storefront That She Then

question 101

Multiple Choice

Alicia spends $20,000 on remodeling a storefront that she then opens as a flower shop. Her business has not been very successful, and she needs an additional $8,000 to keep the flower shop. Which of the following is true?

• A) The $20,000 Alicia spent on remodeling represents a part of the total variable cost of her business.
• B) The $8,000 represents her marginal costs of production.
• C) The $20,000 Alicia spent on remodeling is a fixed cost of her business.
• D) The $8,000 Alicia needs to keep the flower shop open represents her total fixed costs.

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