Fun Time Inc

question 130

Multiple Choice

Fun Time Inc. uses the same property and equipment to provide skiing services for six months during the winter and mountain roller boarding for six months during the summer. Monthly revenue and cost figures during the summer and winter months for Fun Time are shown below. Fun Time's $1,000 monthly fixed costs will be incurred as long as it remains in business.
Which of the following should Fun Time do if it wants to maximize its profit?

• A)operate in both the winter and summer
• B)operate in the summer, but shut down during the winner
• C)operate in the winter, but shut down during the summer
• D)go out of business immediately

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Definitions:

Short Run

A period of time during which at least one of a firm's inputs is fixed, allowing for only some adjustments to production or capacity.

Personalized Sweaters

Custom-made sweaters that are tailored to an individual's preferences, often featuring unique designs, colors, or monograms.

Monopolistically Competitive

A market structure in which many firms sell products or services that are similar but not identical, allowing for competition on factors other than price.

Long Run

A period in which all factors of production and costs are variable, allowing for adjustments in production processes.