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Question: The opportunity cost of production last year was _________ How do you solve for this question? Mike operates a bike retail store and repair shop, Mike's Bikes. Last year, the market value of the firm's showroom and workshop increased from $600,000 to $675,000; the market value of the inventory of unsold bikes decreased from $400,000 to $320,000; and the market value of the firm's tools remained constant at $5,000. The firm paid manufacturers $770,000 for bikes. The cost of electricity and IT services was $25,000. The wages paid to shop assistants were $50,000. Mike is the firm's entrepreneur. He also works part-time at a bike manufacturer for 50 weeks a year that pays $40 per hour. The manufacturer wants Mike to work full time, but instead, he does repairs at Mike's Bikes for 10 hours a week. Normal profit in bike retailing is $40,000 per year. The interest rate is 5 percent per year.

          Question: The opportunity cost of production last year was _________ How do you solve for this question?

Mike operates a bike retail store and repair shop, Mike's Bikes. Last year, the market value of the firm's showroom and workshop increased from $600,000 to $675,000; the market value of the inventory of unsold bikes decreased from $400,000 to $320,000; and the market value of the firm's tools remained constant at $5,000.

The firm paid manufacturers $770,000 for bikes. The cost of electricity and IT services was $25,000. The wages paid to shop assistants were $50,000. Mike is the firm's entrepreneur. He also works part-time at a bike manufacturer for 50 weeks a year that pays $40 per hour. The manufacturer wants Mike to work full time, but instead, he does repairs at Mike's Bikes for 10 hours a week. Normal profit in bike retailing is $40,000 per year. The interest rate is 5 percent per year.

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