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Assume you are the plant manager for a Company, which produces window frames 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) = $130Total Cost (TC) = $1,100 + 135Q + 0.6Q2Marginal 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.
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Planning for risk and identifying resources.
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