Question

John operates a hotdog restaurant where he sells 120 hotdogs per day. He takes the market price of $3 per dog as given, has average variable costs of $2, and average total costs of $4. Which of the following is accurate? Question 7 options: A) John will continue to operate since his operating loss is smaller than his total fixed cost B) we can't say whether John will continue to operate because we don't know if he's in the short run or the long run C) John will shut down since his operating loss exceeds his profit D) John is earning a positive profit E) John will shut down since his operating loss exceeds his total fixed cost

          John operates a hotdog restaurant where he sells 120 hotdogs per day. He takes the market price of $3 per dog as given, has average variable costs of $2, and average total costs of $4. Which of the following is accurate?
Question 7 options:
A) 
John will continue to operate since his operating loss is smaller than his total fixed cost
B) 
we can't say whether John will continue to operate because we don't know if he's in the short run or the long run
C) 
John will shut down since his operating loss exceeds his profit
D) 
John is earning a positive profit
E) 
John will shut down since his operating loss exceeds his total fixed cost

Added by Stephen W.

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