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 1-2 page report to management of the firm as to whether or
not it should continue to operate at a loss?

There's insufficient data to make any recommendation.

I would disagree, but in any case, it might be just a total
coincidence, but O'Sullivan and Sheffrin thought exactly of the same
problem - including these numbers - in their book _Economics - 
Principles and Tools __, and they also include an answer key in their
book.

Hi, PG

So what do O'Sullivan and Sheffrin know that I don't?

You just can't make any sensible recommendation on such skimpy data.

There may be very good reasons why this line of business should be run at a loss.

I can think of a MILLION.

Text book economists have always made TONS of trouble.

Otherwise,

Great to hear you again,

All the Best 

Bryan