00:01
Hello students, the question is, susan quit her job as a teacher which paid her $36 ,000 per year.
00:15
In order to start her own category catering business, she spent $12 ,000 of her savings which had been earning 10 % interest per year.
00:55
On equipment for her business, she also borrowed $12 ,000 from her bank at the 10 % interest which she also spent on equipment.
01:24
For the past several months, she has spent $1 ,000 per month on ingredients and other variable costs.
01:38
Also, the past several months, she has taken in $3 ,500 in monthly revenue in a short run.
02:00
Which of the following statements are correct with reference to this data? we have given option a, for in short run, susan should shut down her business and in the long run, she should exit the industry.
02:30
No, option a is incorrect.
02:34
In a short run, susan should continue to operate her business but in a long run, she will probably face competition from newly entering firms...