Anand Ltd., produces 2,00,000 units of a product ‘Jay’ at a total cost of Rs. 25,00,000 including Rs. 10 per unit of variable cost. The selling price is Rs. 15 per unit. On account of recession, demand has fallen and Anand Ltd., has to cut the selling price by 20 %. The management wants to know if the factory should be shut down till the demand picks up again?

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