How do fixed costs play a role in the analysis

Assignment Help Macroeconomics

Reference no: EM13187574

Say you are the manager of a perfectly competitive firm selling a product. Your business is making a loss because total revenue is less than total costs. What would you do--shut down or continue to operate? Use hypothetical numbers to explain. Information you need to provide include--state the product you are selling, the price of the product, the quantity of the product you produce, fixed costs, total cost, figure out total revenue, total and average variable costs. Then go ahead and make your decision. Explain carefully why it makes better sense to shut down rather than continue to operate or to continue to operate rather than shut down, as the case may be. How do fixed costs play a role in your analysis? What is the difference between shutting down and going out of business?

Reference no: EM13187574

Questions Cloud

State desiccator after heating and before weighing : Why should you store the crucible plus sample in a desiccator after heating and before weighing? why should you heat the sample to constant mass?

Concept and include strengths and weaknesses of papers : Analyse those papers and make a document with usual report format such like Abstract, Introduction, body, conclusion and references and also appendix.

Find the value of k : The value V (in millions of dollars) of a famous painting can be modeled by the equation V = 10ekt, where t represents the year, with t = 0 corresponding to 1980. In 2003, the same painting was sold for $50 million. Find the value of k.

State the standard free energy of activation of a reaction : The standard free energy of activation of a reaction A is 73.9kJ/mol-1 (17.7 kcal mol-1) at 298 K. Reaction B is one million times faster than reaction A at the same temperature. The products of each reaction are 10.0 kJ mol-1 (2.39 kcal mol-1) mo..

How do fixed costs play a role in the analysis : Use hypothetical numbers to explain. Information you need to provide include--state the product you are selling, the price of the product, the quantity of the product you produce, fixed costs, total cost, figure out total revenue, total and averag..

At what rate is oil flowing from the site of the accident : An accident at an oil drilling platform is causing a circular oil slick. The slick is 0.08 foot thick, and when the radius is 750 feet, the radius of the slick if increasing at the rate of 0.5 foot per minute. At what rate (in cubic feet per minut..

Describe why it is important to use crucible tongs : Explain why it is important to use crucible tongs when you transfer the heated crucible

Find the rate of change of c with respect : The ordering and transportation cost C for the components used in manufacturing a product is C=200(500/x^2 + X/x+300), x > or equal to 1 where C is measured in thousands of dollars and x is the order size in hundreds. Find the rate of change of C ..

Determine expanded demand for housing : during the last ten years Orlando, Florida grew rapidly, with new jobs luring young people to the area. Despite increases in population and income growth that expanded demand for housing, the price of existing houses barely increased, why

User Account

All Pages