Business, 19.02.2020 04:28 queenbrebre2294

A profit-maximizing decision must be made about whether to keep a bed & breakfast operating. Until the place sells, the mortgage of $3000/month must be paid, since it is a sunk cost. If the restaurant operates, costs rise by $4000 per month, but revenue will be only $6000 per month. Until the building can be sold,

a. it is best to shut down the bed & breakfast since it is taking a loss.
b. it is best to ignore sunk costs and keep the bed & breakfast operating.
c. it is best to shut down the bed & breakfast even though it is making a profit
d. it is best to keep the bed & breakfast operating because it is profitable.

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