You are a business owner you hired a manager one year ago


You are a business owner. You hired a manager one year ago. Now you can either keep him or replace him by yourself. If you fire him, you require compensating him with $ 50,000. And your reduced spare time has a valued of $ 30, 000 to you. If you keep him, you need to pay him $ 100,000 this year. You already paid him $ 100,000 last year. Suppose all other aspects of your business stay the same. What is the opportunity cost of replacing him?

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Microeconomics: You are a business owner you hired a manager one year ago
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