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1. Igora's pizzeria want to know if it should stay open this spring. Total Revenue will be $ 12,000 per week and Total Cost will be $ 18,000 per week. The fixed cost of running the business is $ 4,000 per week. Should the pizzeria stay open or shut down temporarily? Defend you answer.
2. Nomi's bagel shop is in the same geographical area as Igora's pizzeria. He wants to know if he should shut down. His Total Revenue is $ 10,000 per week and his total cost is $ 13,000 per week. His variable cost is $ 9,000 per week. What should he do and why.
3. Ciarco's new restaurant is one of many Italian restaurants in the Arthur Av section of the Bronx. He is cooking Novo Italian food and people are coming for miles to eat at his restaurant. It takes 3 hours to get a seating at the restaurant. He has 20 tables and it is not very costly to set up this type of restaurant. He is earning more money than his last job-grape crusher at Giovanni's Chianti Vineyards outside of Naples. '
What type of market structure represented in this example? Define your answer.
Will Ciarco earn long run economic profits? Why or why not?
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