Darlene Runs a Fruit and Vegetable Stand in a Medium-Sized

question 62

Multiple Choice

Darlene runs a fruit and vegetable stand in a medium-sized community where there are many such stands. Her weekly total revenue equals $2000. Her weekly total cost of running the stand equals $3500, consisting of $2500 of variable costs and $1000 of fixed costs. What would an economist likely advise Darlene to do?

• A) Keep the stand open for a while longer, because she is covering all of her variable costs and some of her fixed costs.
• B) Keep the stand open, because it is generating an economic profit.
• C) Keep the stand open for a while longer, because she is covering all of her fixed costs and some of her variable costs.
• D) Shut down as quickly as possible in order to minimize her losses.

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