Martin Shrood purchased a vacant lot outside of London for £13,500, because he heard that a shopping mall was going to be built on the other side of the road. He figured that he could make a bundle by puttingin a fast-food outlet on the site. As it turned out, the rumor was false. A sanitary landfill was located on the other side of the road, and Martin’s land was worthless. (£ denotes the British monetary unit, pounds sterling.)*Required: With respect to the economic characteristics of costs, what type of cost is the £13,500 that Martin paid for the vacant lot?

Martin Shrood purchased a vacant lot outside of London for £13,500, because he heard that a shopping mall was going to be built on the other side of the road. He figured that he could make a bundle by puttingin a fast-food outlet on the site. As it turned out, the rumor was false. A sanitary landfill was located on the other side of the road, and Martin’s land was worthless. (£ denotes the British monetary unit, pounds sterling.)*Required: With respect to the economic characteristics of costs, what type of cost is the £13,500 that Martin paid for the vacant lot?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter13: best-practice Tactics: Game Theory

Section: Chapter Questions

Problem 14E

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