Explain the president or the ceo that he or she is wrong

Assignment Help Business Economics

Reference no: EM13155055

Problem 1: At a recent meeting, the president and the CEO of Production, Inc. got into a heated argument about whether or not to shut down the company's plant in Flint, Michigan. The plant currently loses $50,000/month. The president of Production, Inc. argued that the plant should continue to operate until a buyer is found for the facility. This argument was based on the fact that the plant's fixed costs are $61,000/month. The CEO disagreed over this point, arguing that fixed costs do not matter in making the shutdown decision.

Consider both sides of the argument and come to a decision of whether to close the plant or continue to operate it.
How would you explain to either the president or the CEO that he or she is wrong?

Problem 2: A monopolist has determined that marginal revenue is $2.00 and average cost is $1.75. It has also determined that the lowest sustainable average cost is $1.75. To maximize profit, should the firm lower its price, increase its price, or leave the price unchanged? How would you change your response if marginal revenue is $1.50? Explain your responses.

Reference no: EM13155055

Questions Cloud

Write down expression for marginal revenue : write down expression for marginal revenue. choose the quantity and the price to maximize profit, assuming firm can only charge one price.

Problem of alternative minimum taxable income : Tanver Corporation, a calendar year corporation, has alternative minimum taxable income of $7 million in 2010 (before adjustment for adjusted current earnings). If Tanver's adjusted current earnings is $16 million, its tentative minimum tax for 20..

The decomposition of a certain ether was studied : Under these conditions, how long would it take for a sample to decompose to 25% of it original concentration?

The company income statement and balance sheet : During 2010, Robin Wright Tool Company purchased a building site for its proposed research and development laboratory at a cost of $60,000. Construction of the building was started in 2010. The building was completed on December 31, 2011, at a cost o..

Explain the president or the ceo that he or she is wrong : Consider both sides of the argument and come to a decision of whether to close the plant or continue to operate it. How would you explain to either the president or the CEO that he or she is wrong?

Journalize the transactions in the general journal : Christine Ewing is a licensed CPA. During the first month of operations of her business (a sole proprietorship), the following events and transactions occurred. Journalize the transactions in the general journal.

How much gas will dissolve : if 0.55 g of a gas dissolves in 1.0 l of water at 20.0 kPa of pressure, how much will dissolve at 110.0 kPa of pressure?

Compute molality and mass percent of alcohol : Calculate molality and mass percent of alcohol in the mixture. A solution of ethanol, C2H5OH, in water has a concentration of 1.996 mol L-1. At 20.0 ºC its density is 0.9677 g mL-1

What is the probability that the doctor will spend : determined that the consultation time was normally distributed with a mean of 15 minutes and a standard deviation of 2 minutes. What is the probability that the doctor will spend more than 11 minutes?

User Account

All Pages