Total Revenue $3,000 Per Week Total Variable Cost $2,000 Per

question 131

Multiple Choice

Total Revenue $3,000 Per Week Total Variable Cost $2,000 Per Week Total Fixed Cost $2,000 Per Week Let us suppose Harry's, a local supplier of chili and pizza, has the revenue and cost structure shown here.

• A) Harry's should stay open in the long run.
• B) Harry's should shut down in the short run.
• C) Harry's should stay open in the short run.
• D) Harry's should shut down in the short run but reopen in the long run.

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Definitions:

Long-term Liabilities

Financial obligations of a business that are due for repayment more than one year in the future, such as bonds or long-term loans.

Current Liabilities

Financial obligations that a company is expected to pay within one year.

Accounts Payable

Money owed by a business to its suppliers shown as a liability on the company’s balance sheet.

Salaries and Wages Payable

Salaries and Wages Payable are liabilities on the balance sheet representing amounts owed to employees for work performed but not yet paid.