Question

how to work XYZ company's cost function for the next four months is c=500,000+5Q .. If, because of strike, the most the company can produce is br. 100,000 units, should it shutdown? Why or why not?

Answer 1

Answer:

(A) So since BE means cost = revenue, you just need to solve

6Q = 500,000 + 5Q

(B) they told you at the top what the 4-month cost is. That is still true, even if Q=0

(C) find revenue for 100,000. If less than cost, shut down.