ECN HW MOD 5

Directions: Please write a 1000-1500 word paper in which you address the questions below.  Please format your paper according to APA guidelines (including a title page).  Make sure to cite your references in a reference section.  Please visit the Academic Resource Center for guidelines on using LIRN and APA format.

You walk into a restaurant with a friend for lunch and you notice that you are the only customers there.  Your friend comments: “I can’t believe they can afford to keep this place open at lunch time, when they only get a handful of clients.  It doesn’t make sense to stay open for lunch.”

Explain what conditions must be true for a restaurant to find it in its best interest to be open for lunch.  Which costs are relevant when making the decision to stay open?  Consider the cost of rent, equipment, food, and salaries for management, the cooks, and the waiters.

If the restaurant typically had the same number of customers for dinner as it had for lunch, could it continue to operate?  Why?