King Rat (gkr) wrote,
King Rat

Office rents

My answer to the question about office rents: Of course a business that owns it's own office building has to think about rising rents in surrounding buildings. Why? In addition to rising taxes that chiaspod mentioned, think of it this way. Why would you make $5 a day running your own office when you could rent out the space and make $100. It's less work. Better return on investment. Now, if the business owners are content with making one twentieth the money they could make, then perhaps the managers don't need to worry. But I suspect that few owners will tolerate leaving that much money on the table.

It's a classic description of opportunity cost.

Tags: economics

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