Question

Page1page 2 factors of production for the shoe hut $1,500 a month for rented space one additional employee needed $4,500 for inventory and equipment to make custom inserts the shoe hut will require about $1,500 for the first month of business. star's coffee and teas will require for inventory and equipment alone. has a lower barrier to entry.

Answer 1

Answer: THE SHOE HUT will require a less costly investment in labor.

THE SHOE HUT will require less capital in the long term.

STAR’S COFFEE AND TEAS will probably….

Explanation: i just did it!

Answer 2

The factors of production include fixed and variable costs, which impact a business's decisions on operation. The Yoga Center's scenarios highlight the importance of understanding these costs and their effect on revenue and losses. Decisions about shutting down or remaining open depend on the balance between these costs and potential income.

Step-by-step explanation:

The discussion revolves around the factors of production and the costs associated with starting and operating a business such as the Yoga Center. Analyzing the scenarios provided helps us understand the concept of fixed costs, variable costs, and revenues. The Yoga Center illustrates the decisions a business must make when considering its fixed costs (like rent) and variable costs (such as hiring labor).

In the first scenario, the Yoga Center faces a loss of $10,000, which corresponds to its fixed rent cost, due to having no revenue. In the second scenario, the Center has enough clients to generate $10,000 in revenue but incurs higher variable costs of $15,000 for hiring instructors, leading to a loss. The third scenario sees the Yoga Center making $20,000 in revenue, which is more than the rent, but still results in a loss when considering the total variable costs. These scenarios are crucial in business planning and illustrate why some businesses may choose to shut down temporarily if operating losses exceed the fixed costs of staying open.