Question
In: Economics
a. A trendy French restaurant is one of the first businesses to open in a small...
a. A trendy French restaurant is one of the first businesses to open in a small corner of a commercial building still under construction. The restaurant has received rave reviews and has lines of diners waiting for tables most nights. i. In the short run (next few months), what measures should the restaurant take to maximize its profit? Explain. ii. In the long run (next six months and beyond), how can it maximize its profit? (Assume that the impressive state of demand is permanent.)
b. Comment on the following statement: “Average cost includes both fixed and variable costs, whereas marginal cost only includes variable costs. Therefore, marginal cost is never greater than average cost.”
c. “If it were not for the law of diminishing returns, a firm’s average cost and average variable cost would not increase in the short run.” Do you agree with this statement? Explain.
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
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businesses are still open and millions of employees are working to
serve customers. Some of the employees work in their workplaces
while some others work from home. Almost all employees worry
whether they will lose their jobs or if they will have a pay cut.
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employees. Some businesses are still open and millions of employees
are working to serve customers. Some of the employees work in their
workplaces while some others work from home. Almost all employees
worry whether they will lose their jobs or if they will have a pay
cut. It is obvious that unemployment will rise because millions of
employees will lose their jobs and the remaining employees may have
a pay cut (10, 20,...
The coronavirus is hitting businesses and their employees. Some businesses are still open and millions of...
The coronavirus is hitting businesses and their employees. Some
businesses are still open and millions of employees are working to
serve customers. Some of the employees work in their workplaces
while some others work from home. Almost all employees worry
whether they will lose their jobs or if they will have a pay cut.
It is obvious that unemployment will rise because millions of
employees will lose their jobs and the remaining employees may have
a pay cut (10, 20,...
The coronavirus is hitting businesses and their employees. Some businesses are still open and millions of...
The coronavirus is hitting businesses and their employees. Some
businesses are still open and millions of employees are working to
serve customers. Some of the employees work in their workplaces
while some others work from home. Almost all employees worry
whether they will lose their jobs or if they will have a pay cut.
It is obvious that unemployment will rise because millions of
employees will lose their jobs and the remaining employees may have
a pay cut (10, 20,...
The coronavirus is hitting businesses and their employees. Some businesses are still open and millions of...
The coronavirus is hitting businesses and their employees.
Some businesses are still open and millions of employees are
working to serve customers. Some of the employees work in their
workplaces while some others work from home. Almost all employees
worry whether they will lose their jobs or if they will have a pay
cut. It is obvious that unemployment will rise because millions of
employees will lose their jobs and the remaining employees may have
a pay cut (10, 20,...
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