Traditional Culture Encyclopedia - Travel guide - Why don't the hotels and restaurants around the scenic spots close in the off-season?
Why don't the hotels and restaurants around the scenic spots close in the off-season?
Of course, this involves cost theory. What time does it close? This is when profits are not enough to cover variable costs. What are the variable costs? For example, the raw materials of meals, overtime wages of employees during business hours, etc., are all linked to the quality of business. When the money earned is not enough to subsidize these costs, the hotel closes. In fact, even in the off-season, opening the door to do business is better than closing the door. Because the profit is not necessarily higher than the total cost, but higher than the variable cost, it is possible. Total cost = fixed cost+variable cost. Fixed costs are consumed whether you open the door or not, such as the rent of the facade, the depreciation of tables and chairs and so on. In a word, profit
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