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    Short run losses

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    If there is a debate between a CEO and the president of a company as to whether or not to shut down a firm's plant in Texas that is currently losing $60,000 monthly and the president of the company says they should continue to operate, at least until a buyer is found for the production facility because that the Texas plant's fixed costs are $68,000 per month. However, the CEO says that fixed costs don't matter.

    1. Should the Texas plant be closed or continue to operate at a loss in the short run?

    2. How would you explain to the incorrect party that he is wrong?

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    https://brainmass.com/economics/factors-of-production/short-run-losses-47994

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    1.Should the Texas plant be closed or continue to operate at a loss in the short run?
    The Texas plant should continue to operate in the short run.

    2. How would you ...

    Solution Summary

    Short run losses are dissected.

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