Explore BrainMass

Explore BrainMass

    study of average variable cost, fixed cost and production

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    You've been hired by an unprofitable firm to determine whether it should shut down its unprofitable operation.

    The firm currently uses 70 workers to produce 300 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 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 report to management of the firm as to whether or not it should continue to operate at a loss?

    © BrainMass Inc. brainmass.com March 4, 2021, 5:46 pm ad1c9bdddf
    https://brainmass.com/economics/production/study-of-average-variable-cost-fixed-cost-and-production-10646

    Solution Preview

    The firm currently uses 70 workers to produce 300 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 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.
    <br>
    <br>This ...

    Solution Summary

    A problem to determine whether if unprofitable operations should cease is provided.

    $2.49

    ADVERTISEMENT