Question

Ayden is the sole proprietor of a shoe repair shop in Atlanta. His business has been increasing for five years and he is now considering opening a second repair shop downtown. Ayden is putting together a plan, estimating costs, projecting potential revenue of a second shop. Ayden is behaving rationally because:

Answer 1

Answer:

His conclusion is based on his own soul-interest.

Explanation:

In the following situation, Ayden is a sole Proprietor he has no team or management system to discuss the idea of opening a new shop, Ayden has to decide about his all expenses, revenues, sources of finance and decision cost from his knowledge and experience.

• Ayden is behaving rationally because he is fully liable for his decisions.

Answer 2

Sole proprietor is the individual or person who owns the unincorporated business by himself or herself. The person is the sole member and is the only one who runs the enterprise.

Ayden is behaving rationally because a sole proprietorship, the decision from management, budget, or investment is done by the owner only.

The sole proprietor works individually and has no team to manage or lead the opening of the second repair shop. Ayden is deciding about the estimated cost, potential revenue of the second repair shop, and making a plan as he is the single owner of the enterprise.

Thus, Ayden is behaving rationally because he is liable for his decision and planning.

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