Weekly Italian
Stay open or close for jan?
An Italian restaurant has to decide whether to stay open in January or to close down until the spring. He expects, based on his experience from the previous 20 years, that his weekly revenue will be $3,500. His fixed costs per week are $3,000. The costs of the food, labor, liquor, plates, silverware, etc. to run the restaurant on a weekly basis is $4,500. Should they close down or stay open this January?
Since his variable costs exceed his revenue, he is losing money operating than not operating.
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