The firm currently uses 70,000 workers to ...

The firm 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.

Please submit your assignment.


Points Possible: 60
Date Due: Sunday, Oct 18, 2009
Objective: Identify current trends in macro and microeconomics.
Critically examine market structures, consumer behavior, production costs, and international trade.
Use effective communication techniques.

Submitted Files: Submit Assignment
Score: N/A
Instructor Comments: In order to maximize points earned, the following template should be used in answering this assignment. (Please copy and paste this template into a Word document and state your answers below each question.) Include a cover sheet and citations that follows APA guidelines (5 points):

1. a. Appropriate table showing breakdown of data/results/calculations on the basis of which you arrived at your decision in 1c. (20 points)



1.b. What formula(s) are you applying in order to decide whether to shut down or not?. (15 points)



1.c. What is your conclusion regarding whether the firm should shut down or not? Justify your answer by referring to both parts 1a and 1b. . (20 points)