Answer:
Bette's Breakfast should increase the price or change the cost´s structure.
Explanation:
Bette's Breakfast should increase the price to get any profits because the total of the cost of serving that breakfast is higher than the price.
Profit= price* sales -((Variable cost * sales) +Fixed cost)
Other option is changing the structure of cost per meal.
Answer:
C. continue producing in the short run, but plan to go out of business in the long run.
Explanation:
Given:
Average cost per meal = $5
The costs of waiters, cooks, power, food etc. = $3.95 per meal
costs of the lease, insurance and other such expenses = $1.25 per meal
Total cost = fixed cost + variable cost
= $3.95 + $1.25
= $5.2
Total cost, $5.2 per meal is greater than cost per meal, which is clearly a loss of $0.2 per meal.
In the long run, Bette will go out of business.
