Sven owns ABBA Bar (a bar dedicated to the Disco band ABBAS). Sven pays his landlord a monthly
rent of $3,000. If Sven breaks the lease before the end of the calendar year, he must pay $2,000 for
each of the remaining months in that year. Sven just purchased $40,000 of ABBA-themed bar fixtures;
the fixtures have absolutely no value in any alternative use (a sacrilegious thing to say). Each weekend
Sven contracts with a security company that provides four security guards for a total of $1,200
a. Is the $1,200 payment to the security firm a variable cost, sunk cost, or avoidable fixed cost?
Explain your answer
b. Suppose that at the end of August Sven permanently shuts down his bar. What are Sven's sunk costs?
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Sven owns ABBA Bar (a bar dedicated to the Disco band ABBAS). Sven pays his landlord...