Reasons behind shut down the firm’s plant in miami

Assignment Help Macroeconomics
Reference no: EM13197873

At a recent board meeting, the president and CEO got into a heated argument about whether to shut down the firm’s plant in Miami. The Miami plant currently loses $60,000 monthly. The president of the firm argued that the Miami plant should continue to operate, at least until a buyer is found for the production facility. The president’s argument was based on the fact that the Miami plant’s fixed costs are $68,000 per month. The CEO exploded over this point, castigating the president for considering fixed costs in making the shutdown decision. According to the CEO, “Everyone knows fixed cost don’t matter!” 


a) Should the Miami plant be closed or continue to operate at a loss in short run?

 
b) How would you explain to the incorrect party that he or she is wrong?

Reference no: EM13197873

Questions Cloud

Globalisation of the international ?financial markets : Examining the important factors that driving globalisation of the international ?financial markets and providing an analytical description of one or more financial crises that have occurred ?in the world's economy
How many miles did he drive at the reduced speed : Tom Quig travel 250 miles. FOr most of the trip he averaged 70 mph, but for one period of time he was slowed to 10 mph due to a major car accident. If the total time of travel was 7 hours, how many miles did he drive at the reduced speed?
Define human development has four basic systems : For your final paper will construct a comprehensive study on The Bioecological Model of Human Development. The Bioecological Model of Human Development has four basic systems.
Find the marginal production cost per lamp : At a selling price of $ 65 , a lamp company breaks even on total sales of $ 4550 . If the company's overhead is $ 420 , find the marginal production cost per lamp and find the profit on sales of 154 lamps.
Reasons behind shut down the firm’s plant in miami : At a recent board meeting, the president and CEO got into a heated argument about whether to shut down the firm’s plant in Miami should the Miami plant be closed.
How to write a program to calculate the total expenses : While purchasing certain items, a discount of 10% is offered if the quantity purchased is more than 1000. If quantity and price per item are input through the keyboard, write a program to calculate the total expenses.
Find the area of the base to the nearest tenth : the volume of a cone with a height of 18 millimeters is 471 cubic millimeters. find the area of the base to the nearest tenth.
Define ideas and specific details for essay''s content : Select a topic for your IP 1 argument essay and use prewriting strategies (freewriting, mapping, clustering, brainstorming) to explore a specific issue related to the selected topic to develop a thesis statement and supporting ideas and specific d..
How much work is done in pulling the bucket : how much work is done in pulling the bucket to the top of the well.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd