Practice Quiz

AP Economics Exam Prep

Category - Economics

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Which of the following is the most likely economic explanation for why a local restaurant that is busy and has many loyal customers could go out of business?
  1. The restaurant is spending too little on advertising.
  2. The restaurant is paying too little for rent and food.
  3. The restaurant has more customers than it needs.
  4. The restaurant's costs are higher than its revenues.
Explanation
Answer: D - The restaurant's costs are higher than its revenues.
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