Economics in global environment

Reference no: EM1375888

Suppose You have been employed by an unprofitable company to determine whether it should shut down its unprofitable operation.

The company currently uses 70,000 workers to produce 300,000 units of output per day. The daily wage (per worker) is $100, and the price of the firm's output is $30. The cost of other variable inputs is $500,000 per day. Although you don't know the firm's fixed cost, you know that it is high enough that the firm's total costs exceed its total revenue.

Provide a 1-2 page report to management of the firm as to whether or not it should continue to operate at a loss? Be sure to show your work to support the decision you outlined in your report.

IP: choose Q = 300,000 and continue operations or choose Q =0, where Q=0 means "shut down". This decision for this IP is considered a short run decision. This IP does not consider the option of closing and dissolving the business permanently, but rather which output to choose: Q =300,000 or Q =0.(Note that shut down is not bankruptcy; this IP does not concern bankruptcy.) Explain and support your answer. Note that this IP does NOT ask you to "determine how to make this business more profitable or how to lower the costs or how to earn more revenue." You must select Q =0 or Q= 300,000, and provide the reason.

Reference no: EM1375888

Questions Cloud

Impact of 9/11 on the american economy : Assess The Impact of September 11, 2001 on 4-section of American Economy. Examine the effects upon selected four segments of the American economy as a result of these attacks

How engineered fabrics makes bladders for airplane tanks : To check the bladders, organizations workers must be able to crawl in an 18-inch diameter hole in the bladder side also look for light leaks. A limitation on weight also height of individuals working in quality control at this organization would b..

Determining the payoff structure : You inherit a package of call options on a stock currently selling for fifty three dollar. In a year, the stock could sell for anywhere between $40 and $80.

Question about economics in global environment : We make selections as customers every day. Opportunity cost is defined as a person's next best option or the cost of what you give up when you make a choice.

Economics in global environment : Suppose You have been employed by an unprofitable company to determine whether it should shut down its unprofitable operation.

Relationships between the economic concern : As an worker of World Bank, you have been tasked to research one economic concern in an Asian nation and write a report on your findings.

Discuss how liquidity money curve derived : Discuss how is the liquidity money (LM) curve derived and determine what impacts it and how does it impact the global economy? Provide examples and support your claims.

Illustrate what kind of behaviour controls best facilite : Illustrate what kind of behaviour controls will best facilitate positive interactions both within the teams also among the teams.

Draw the oc curve for the plan you developed : Joshua Simms has currently been placed in charge of purchasing at the Med-Tech Labs, a medical testing laboratory. His job is to purchase testing equipment also supplies.

User Account

All Pages