Assume you are the plant manager for Crossroads Sign Company, which produces road signs in a market

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Assume you are the plant manager for Crossroads Sign Company, which produces road signs in a market that approximates perfect competition. Due to a slow economy, business has been slow and the company is losing money every month. The owners have asked you whether to continue operations or to shut down at least until the economy improves. You have the following information available:

Marginal Revenue (MR) = $130

Total Cost (TC) = $1,100 + 135Q + 0.6Q2

Marginal Cost (MC) = 135 + 1.2Q

As the plant manager, should you recommend to the owners that the plant be shut down for a while? Justify your answer using at least two analytical techniques and presenting the information graphically.


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Financial Accounting Information For Decisions

ISBN: 978-0324672701

6th Edition

Authors: Robert w Ingram, Thomas L Albright

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