Question

Some restaurants are closed during some parts of the day because

• A. revenue is not high enough to cover the fixed costs
• B. revenue is not high enough to cover the variable costs
• C. revenue is not high enough to cover the total costs
• D. revenue is greater than the variable cost

Answer 1

The correct option is B

revenue is not high enough to cover the variable costs

Some restaurants are closed during some parts of the day because revenue is not high enough to cover the variable costs and hence meets the short-run shutdown condition.