Question

REFLECTION QUESTIONS

11
You speak to a business owner that is taking in almost $2,000 in revenue each month. The owner
still says that they're having trouble keeping the doors open. How can that be possible? Use the
terms revenue, expenses, and profit/loss in your answer.
Type your entry and click submit...

Answer 1

Expenses must be close or above $2000 per month

Step-by-step explanation:

For a business to operate at a profit, its revenues must exceed the expenses by a sizable proposition. Revenues refer to income from business activities, while expenses are the cost incurred in generating that income. Should the costs match or be higher than the revenue, a business will find it challenging to continue operating.

In this case, the business owner is generating revenues of $2000 per month. If he is struggling to stay open, it means the monthly expenses are around or above $2000. The $2000 that the business is generating per month is not sufficient to cater for all expenses and the desired profits. The business owner is probably making losses, and that why he is having trouble keeping the doors open.