Question

An increase in the cost of rent can be offset by:

a) Immediately move to a cheaper facility.
b) Immediately raise prices to cover the increase.
c) Working to reduce other fixed expenses such as utilities and telephone.
d) None of the above

Answer 1

An increase in the cost of rent can be offset by immediately moving to a cheaper facility, immediately raising prices, or working to reduce other fixed expenses.

Step-by-step explanation:

In the case of an increase in the cost of rent, several options can be pursued to offset the increase:

1. Immediately moving to a cheaper facility, which can help reduce rental expenses.
2. Immediately raising prices to cover the increase in rent, which can pass the cost onto customers.
3. Working to reduce other fixed expenses such as utilities and telephone, which can help free up funds to compensate for the rent increase.

Therefore, the correct answer is (a) Immediately move to a cheaper facility, (b) Immediately raise prices to cover the increase, and (c) Working to reduce other fixed expenses such as utilities and telephone.