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Justin Brimer owns his own taxi, for which he bought a $23,000 permit to operate two years ago. Mr. Brimer earns $34,000 a year operating
Justin Brimer owns his own taxi, for which he bought a $23,000 permit to operate two years ago. Mr. Brimer earns $34,000 a year operating as an independent but has the opportunity to sell the taxi and permit for $92,000 and take a position as dispatcher for Carter Taxi Co. The dispatcher position pays $33,000 a year for a 31-hour week. Driving his own taxi, Mr. Brimer works approximately 46 hours per week. If he sells his business, he will invest the $92,000 and can earn a 10 percent return. Required a. Determine the opportunity cost of owning and operating the independent business. pportunity cost b-1. Calculate the earnings of Justin Brimer operating as an independent. Operating as an independent b-2. Calculate the earnings of Justin Brimer working as a dispatcher. Working as a dispatcher b-3. Based solely on financial considerations, should Mr. Brimer sell the taxi and accept the position as dispatcher? O Yes O No
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