Question: In Problem, under what conditions would GM stop producing the Chevy Volt and exit the market for electric cars? Explain your answer.
Problem: Chevy Volt Production Temporarily Shut Down GM will temporarily lay off 1,300 employees as the company stops production of the electric car, Chevy Volt, for five weeks. GM had hoped to sell 10,000 Volts last year, but ended up selling just 7,671. It plans to maintain inventory levels by adjusting production to match demand.
a. Explain how the shutdown decision will affect GM Chevy Volt's TFC, TVC , and TC .
b. Under what conditions would this shutdown decision maximize Chevy Volt's economic profit (or minimize its loss)? Explain your answer.
c. Under what conditions will GM start producing the Chevy Volt again? Explain your answer