Agave, Six Feet Under, Globe, Silk, Sotto Sotto and Zocalo are all restaurants in Atlanta. Suppose at the profit maximizing quantity, Zocalo charges $22 for each dinner entrée, and its ATC is equal to $24. What should Zocalo do?
A) Cannot determine whether Zocalo should stay open or shut down in short run, but Zocalo should go out of business in the long run.
B) Produce in the short run and go out of business in the long run.
C) Shut down in the short run and go out of business in the long run.
D) Cannot determine whether Zocalo's should stay open or shut down in the short or long run.
Correct Answer:
Verified
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