Suppose a Restaurant That Is Highly Profitable During the Summer

question 137

Multiple Choice

Suppose a restaurant that is highly profitable during the summer months is unable to cover its total cost during the winter months. If it wants to maximize profits, the restaurant should

• A) shut down during the winter, even if it is able to cover its variable costs during that period.
• B) continue operating during the winter months if it is able to cover its variable costs.
• C) go a out of business immediately; losses should never be tolerated.
• D) lower its prices during the summer months.