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

Please advise why you chose one reason over the other.