Bethany Is a Chef Who Owns Three Moderately Successful Restaurants

question 83

Multiple Choice

Bethany is a chef who owns three moderately successful restaurants with innovative menus. Based on what you have read, which of these approaches could help her improve her profits?

• A) Change her menus and décor to appeal to economy-minded consumers.
• B) Carefully time the opening of her business and focus on underserved niches.
• C) Use her existing knowledge, equipment, and staff to launch a catering business.
• D) Expand to new locations in economically struggling areas.

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Definitions:

Economic Profit

The variance between a company's overall incomes and its combined explicit and implicit expenses.

Implicit Costs

The opportunity costs of using resources owned by the firm for its operations instead of renting, selling, or utilizing them in other ways.

Implicit Costs

The opportunity costs of using resources that a firm already owns, typically non-out-of-pocket costs.

Explicit Costs

Direct, out-of-pocket payments for goods or services used in production, such as wages or rent.