Fun Time Inc. uses the same property and equipment to provide skiing services for 6 months during the winter and mountain roller boarding for 6 months during the summer. Monthly revenue and cost figures during the summer and winter months for Fun Time are shown below. Fun Time's $1000 monthly fixed costs will be incurred as long as it remains in business. Winter Months Summer Months

Total revenue $10,000 $4,000
Operating (variable) costs $6000 $4,600
Fixed costs $1000 $1000
Net Revenue $3000 -$1600
Which of the following should Fun Time do if it wants to maximize its profit?


Answer: Operate in the winter, but shut down during the summer

Business

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