What is the opportunity cost of using the unused bundling

Reference no: EM13188323

The World of Videos operates a retail store that rents move videos. For each of the last 10 years, World of Videos has consistently earned profits exceeding $25,000 per year. The store is located on prime real estate in a college town. World of Videos pays $2000 per month in rent for its building, but it uses only 50 percent of the square footage rented for video rental purposes. The other portion of the rented space is essentially vacant. Noticing that World of Videos only occupies a portion of the building, a real estate agent told the owner of World of Videos that she could add $1200 per month to her firm's profits by renting out the unused portion of the store. While the prospect of adding an additional $1200 to World of Videos bottom line was enticing, the owner was also contemplating using the additional space to rent video games. What is the opportunity cost of using the unused portion of the building for vidoe game rentals?

Reference no: EM13188323

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