Answer to Question #83395 in Microeconomics for kawthar

Question

What is your explanation of the prevailing cost conditions of the chosen firm ( restaurant)?

Answer 1

It can be quite tasking to understand the prevailing cost conditions of any business enterprise since such discovery can adversely affect its competitive advantage in a given market. Thus, the cost structure of a restaurant can only be predicted. A restaurant with increased profitability implies low cost of production. On the other hand, reduction in profit implies a rise in cost of production.