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In: Economics

Suppose you decide to open a digital photo printing store. You rent store space (signing a...

Suppose you decide to open a digital photo printing store. You rent store space (signing a one-year lease) and you take out a loan at a local bank and use the money to purchase 10 digital photo printing machines. Six months later a large chain opens a photo printing store two blocks away from yours. As a result, the revenue you receive from your photo printing store, while sufficient to cover the wages of your employees and the costs of paper and utilities, doesn’t cover all of your rent and the interest and repayment costs on the loan you took out to purchase the printing machines. Should you continue operating your business?

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Rahul Sunny answered 2 years ago
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