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Mika Owns an Auto Repair Shop

Question 137

Multiple Choice

Mika owns an auto repair shop. She has incurred over $100,000 in startup costs and currently faces fixed costs of $5,000 per month. She also has labor costs equal to $3,000 per month. Mika earns revenue of $10,000 per month. Given this information, Mika should


A) close her business, since she will never make back the $100,000 she spent to start it.
B) close her business, since she has lost $98,000.
C) continue to run her business, since she is making a profit of $2,000 per month.
D) continue to run her business, since she is making a profit of $10,000 per month.

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