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Determining the break even point to remain in business

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1. Why does the restaurant even bother to stay open, because it might seem that the revenue from the few customers could not possibly cover the cost of running the restaurant? Why do you think the restaurant still open even though it's not covering all its costs?

2. In making the decision whether to open for lunch, what kind of costs must the restaurant consider in the decision making and why?

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Solution Summary

There are a number of reasons that a restaurant will stay open even when the customers do not seem enough to cover costs.

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It appears that some background information is missing in this question. But, based on the questions I think I can provide some insight.

1. There are a number of reasons that a restaurant will stay open even when the customers do not seem enough to cover costs. If it is a corporate-owned franchise, often they will remain open in order to serve an area and act as the face of the company and provide for positive PR. In this case, other restaurants generate enough revenue to keep the ...

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