If a restaurant in a summer tourist area is highly profitable during the summer months but unable to cover even its variable costs during the winter months, the restaurant should
a. go out of business immediately, because no firm should continue to operate if it is losing money; doing so is contrary to the idea of profit maximization.
b. go out of business as soon as the summer is over; losses should never be tolerated.
c. operate during all months of the year as long as its profits during the summer exceed its losses during the winter.
d. shut down during the winter, but continue operating during the summer as long as the summer profits exceed the losses (fixed costs) during the winter shutdown period.
D
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Indicate whether the statement is true or false
Which of the following is true?
a. The natural rate of unemployment is present when the economy is operating at full employment. b. The natural rate of unemployment is equal to the number of persons unemployed divided by the number of persons in the labor force. c. The natural rate of unemployment is primarily the result of the ups and downs of the business cycle. d. Public policy cannot influence the natural rate of unemployment.
Suppose that the federal funds rate and the discount rate are equal initially at 3%. If the discount rate is then lowered to 2.5%, to whom will a bank be more likely to go for a loan: the Federal Reserve or another bank? Explain your answer in detail, and be sure to mention the impact that this situation would have on the money supply
In general, economists place all factors of production into which three categories?
A. Technology, labor, and capital B. Technology, land, and capital C. Land, labor, and capital D. Land, labor, and technology