Problem: You have 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 input 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 cost exceeds its total revenue.