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.

Question

Quizplus · Accepted Answer

In the short run, Harry's should stay open because total revenue ($3,000) covers total variable costs ($2,000), contributing $1,000 towards fixed costs.