Explain affects of slow economy on a company

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Reference no: EM13178729

Assume you are the plant manager for Crossroads Sign Company, which produces road signs in a market that approximates perfect competition. Due to a slow economy, business has been slow and the company is losing money every month. The owners have asked you whether to continue operations or to shut down at least until the economy improves. You have the following information available: Marginal Revenue (MR) = $130 Total Cost (TC) = $1,100 + 135Q + 0.6Q2 Marginal Cost (MC) = 135 + 1.2Q As the plant manager, should you recommend to the owners that the plant be shut down for a while? Justify your answer using at least two analytical techniques and presenting the information graphically. I think that I have the answer but graphing MC, MR and TC I don't understand the grahping process.

I set up TR-TC to get the output level for maxium economic profits which I have was -2424.40

Set iMC=Change TC/Q to get ponit of minimuc Change TC Q= 42.817

Graphing was unclear; need to know if I at least started corrected with problem.

Reference no: EM13178729

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Explain affects of slow economy on a company : Marginal Revenue (MR) = $130 Total Cost (TC) = $1,100 + 135Q + 0.6Q2 Marginal Cost (MC) = 135 + 1.2Q As the plant manager, should you recommend to the owners that the plant be shut down for a while? Justify your answer using at leas..

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