Asked by Billy Bahous on Jun 29, 2024
Verified
Refer to Scenario 9.5. In the short run, if the restaurant shuts down, it ________ variable costs and ________ revenue.
A) has; earns
B) has; earns no
C) has no; earns
D) has no; earns no
Variable Costs
Costs that vary directly with the level of production or output, such as raw materials and direct labor expenses.
Revenue
The total amount of money received by a company for goods sold or services provided during a certain period.
- Determine the short-run operating conditions for a firm, including whether to operate, shut down, or go out of business.
Verified Answer
RC
Rassa ChamlingJun 30, 2024
Final Answer :
D
Explanation :
In the short run, if the restaurant shuts down, it incurs no variable costs because it is not operating and generating expenses related to production (like wages and materials). It also earns no revenue because it is not selling any meals.
Learning Objectives
- Determine the short-run operating conditions for a firm, including whether to operate, shut down, or go out of business.