Question
Many small businesses have had to decide to whether close or remain in business during the recent pandemic.This is especially true of many local restaurants.Some
Many small businesses have had to decide to whether close or remain in business during the recent pandemic.This is especially true of many local restaurants.Some have decided to adjust their services to take-out or delivery only, while others have decided to shutter completely or shut-down in the short-run.Assuming that the market for restaurant food is perfectly competitive and all restaurants face fixed costs in the short run for things such as rent or mortgage payments, describe why some may minimize losses by shutting down completely while others have decided to continue to produce and serve food via take-out and delivery in the short-run.In your explanation, describe what role fixed and variable costs play in the decision process.
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