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(answered) – 1)Assume you own a pizza shop close to the campus at MonroeDescriptionSolution downloadThe Question1)Assume you own a pizza shop close to the campus at Monroe College. ?You have owned and operated your pizzeria for more than 10 years. ?During that time, your annual operating costs have increased from $28,000 per year to $91,000 per year. ?At the same time, revenues have increased from $250,000 per year to $350,000 based mainly on increasing the price of a slice of pizza from 75 cents to $2.00 per slice. ?As the college community has grown, so has your competition. ?Two new pizzerias have opened in a 3 block radius and the college cafeteria now sells a subsidized pizza and soda lunch special for $2.50. ?Although revenues have increased, your profits are now only 10% of revenues vs 30% you enjoyed in your 1st three years. ?You are preparing your operating budget for next year and realize that the profit margin will decline even more over the next 2 years to the point where you could lose money in thethridyear. ?Should you close in the short term or try to find new ways of operating??In your response consider: fixed vs variable costs, labor costs, economies ordiseconomiesof scale (e.g. should you partner with your competition to lower your raw material costs by ordering larger quantities), what is the industries normal profit return, increasing marketing, etc.

(answered) – 1)Assume you own a pizza shop close to the campus at Monroe

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