# managerial economics

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 plant's fixed costs are \$68,000 per month. The CEO exploded over this point in considering the shutdown decision. Accodring to the CEO, everyone knows fixed costs don't matter.
a. Should the Miami plant be closed or continue to operate at a loss in the short run?
b. How would you explain to the incorrect party that he or she is wrong?

1. 👍 0
2. 👎 0
3. 👁 482
1. a. Should the Miami plant be closed or continue to operate at a loss in the short run? The Miami plant should not be closed.
b. How would you explain to the incorrect party that he or she is wrong? The \$68,000 in fixed costs will still exist until the plant is sold, if they shut down and do not produce anything the plant may lose \$68,000 a month instead of \$60,000.

1. 👍 0
2. 👎 0

## Similar Questions

1. ### US History

Use the quotation to answer the question. It is said that the quality of recent immigration is undesirable. The time is quite within recent memory when the same thing was said of immigrants who, with their descendants, are now

2. ### ela

How can text features help a reader analyze an author's argument?(1 point) They show where the most important information about the argument is located. The include examples and reasons that support the argument not found in the

A diver stands on the end of a diving board as shown in the figure on the right. The mass of the diver is 58 kg and the mass of the uniform diving board is 35 kg. Calculate the magnitudes and directions of the forces exerted on

4. ### English

The President sent the ambassador an invitation to the meeting. What is the correct sentence pattern?

1. ### algebra

A board is leaning against a building so that the top of the board reaches a height of 18 feet. The bottom fo the board is on the groung 4 feet away from the wall. What is the slope of the board as a positive number?

2. ### PHYSICS

A diver leaves a 3-m board on a trajectory that takes her 2.7m above the board and then into the water 2.9m horizontally from the end of the board.At what speed did she leave the board?At what angle did she leave the board?

3. ### Physics (A-level)

A ball was projected horizontally at a speed of 0.52 m s–1 across the top of an inclined board of width 600 mm and length 1200 mm. It reached the bottom of the board 0.9 s later (Figure 4). Calculate: a the distance travelled by

4. ### Psycholofgy

Can someone please help! I choose C You enter Donald's board room and are seated across a large, imposing table from him. This wide table helps this CEO maintain _____ distance between him and his clients and will formalize the

1. ### Physics

A diver leaves a 3-m board on a trajectory that takes her 2.8m above the board and then into the water 2.7m horizontally from the end of the board.At what speed and angle did she leave the board?

2. ### managerial economics

Several years ago, Nabisco spent \$330 million building a facility in Brazil to produce Oreo cookies and Ritz crackers for sale in their South American markets. At a recent board meeting, managers at Nabisco were discussing closing

3. ### Math

A corporation has 7 members on its board of directors. How many different ways can it elect a president, vice president,secretary, and treasurer?

4. ### English

Which sentence sets an informal tone? When the room has been cleared, we need to develop an agenda for the meeting. Once the room has been cleared, we can establish the protocol for the meeting. When the room is clear, let's get