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Pavel [41]
3 years ago
10

Suppose two cities are considering tearing down their stadiums to build new ones. In one city, the old stadium cost $5 million t

o build, while in the other city, the old stadium cost $50 million to build. If all else is equal, what can we say about how the costs of the old stadiums should affect the cities’ decisions?
Business
2 answers:
SashulF [63]3 years ago
5 0

Answer:

The Cost to build the old stadium shouldn't be considered  -  The cities shouldn’t consider the cost to build the old stadium, which is a sunk cost. They should be examining whether the benefits of tearing down the old stadium and putting up a new stadium outweigh the costs of that decision.

timofeeve [1]3 years ago
4 0

Answer:

These are the options for the question:

A. They should be more willing to tear down the $5 million stadium, because it cost less to build.

B. They should be more willing to tear down the $50 million stadium, because it cost more to build.

C. The cost to build the old stadium shouldn’t be considered.

And this is the correct answer:

A. They should be more willing to tear down the $5 million stadium, because it cost less to build.

Explanation:

City A will likely be more willing to tear down its old stadium because it costed $5 million to build. City B, on the other hand, will have to think twice because a stadium that costed $50 billion to build could have more value than it seems, or the City could simply not have enough money to build a better new stadium (something that would probably cost more than $50 billion to do).

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Answer:

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Answer:

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Explanation:

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Answer:

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