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Please read the attached article “Near-Empty Restaurants and Off-Season Miniature Golf” (pdf). Answer the following questions: What consideration must the restaurant owner weigh in whether to open for lunch? What is the role of fixed cost in the owner’s decision? Your answer should be a short typed paper. Students are encouraged to use the library resources (shown below) to research their papers. Please review the the Case Study Grading Rubric as w

CASE STUDY UNIT 4- Near-Empty Restaurants and Off-Season Miniature Golf, Case Study – Page 275
Near-Empty Restaurants and Off-Season Miniature Golf Have you ever walked into a restaurant for lunch and found it almost empty? Why, you might have asked, does the restaurant even bother to stay open? It might seem that the revenue from so few customers could not possibly cover the cost of running the restaurant. In making the decision of whether to open for lunch, a restaurant owner must keep in mind the distinction between fixed and variable costs. Many of a restaurant’s costs—the rent, kitchen equipment, tables, plates, silverware, and so on—are fixed. Shutting down during lunch would not reduce these costs. In other words, these costs are sunk in the short run. When the owner is deciding whether to serve lunch, only the variable costs—the price of the additional food and the wages of the extra staff—are relevant. The owner shuts down the restaurant at lunchtime only if the revenue from the few lunchtime customers would fail to cover the restaurant’s variable costs. An operator of a miniature-golf course in a summer resort community faces a similar decision. Because revenue varies substantially from season to season, the firm must decide when to open and when to close. Once again, the fixed costs—the costs of buying the land and building the course—are irrelevant in making this short-run decision. The miniature-golf course should be open for business only during those times of year when its revenue exceeds its variable costs. The firm shuts down if total revenue is less than variable cost. By dividing both sides of this inequality by the quantity Q, we can write it as: The left side of the inequality, TR/Q, is total revenue P × Q divided by quantity Q, which is average revenue, most simply expressed as the good’s price, P. The right side of the inequality, VC/Q, is average variable cost, AVC. That is, a firm chooses to shut down if the price of the good is less than the average variable cost of production. This rule is intuitive: When choosing to produce, the firm compares the price it receives for the typical unit to the average variable cost that it must incur to produce the typical unit. If the price doesn’t cover the average variable cost, the firm is better off stopping production altogether. The firm still loses money (because it has to pay fixed costs), but it would lose even more money by staying open. The firm can reopen in the future if conditions change so that price exceeds average variable cost.
Carney, J. (2017). Near empty restaurants and off-season miniature golf. In N.G. Mankiw, Principles of macroeconomics (p. 275). Boston, MA: Cengage.

Case Study Grading Rubric
Student is required to submit a two- page paper, double spaced with proper APA citations.
Item 1. Evidence of preparation: clear and logical organization, effective introduction, body and conclusion.
Each item is rated on the following rubric. 1= Very poor 2 = Poor 3 = Adequate 4 = Good 5 = Excellent
Item 2. Content: accurate & relevant information, knowledgeable about the case study assigned and offeres strategies for dealing with the problems identified in the case study.
Each item is rated on the following rubric. 1= Very poor 2 = Poor 3 = Adequate 4 = Good 5 = Excellent
Item 3. Quality of critical thinking: Student must exhibit college level critical thinking skills of both problems identified in the case study and proposed solution.
Each item is rated on the following rubric. 1= Very poor 2 = Poor 3 = Adequate 4 = Good 5 = Excellent
Item 4. Creativity: Students are encouraged to use the Course Info Guide, linked in the assignment, to research the topic and offer analysis and proposed solutions that are both unique and innovative. Be sure to cite your references.
Each item is rated on the following rubric. 1= Very poor 2 = Poor 3 = Adequate 4 = Good 5 = Excellent
Total Score: _________ X 5 = _________ based out of 100 points.