Write a 4 page essay on Should the firm shutdown immediately or should continue operating.3. For one of the cases, if the firm can operate at a loss in the short-run, how many employees need to be lai

Write a 4 page essay on Should the firm shutdown immediately or should continue operating.

3. For one of the cases, if the firm can operate at a loss in the short-run, how many employees need to be laid off in order for the company to break even? To calculate the number of workers to be laid off, divide the loss for the two situations by the daily wage per worker.

It is possible that the workers can increase their productivity through overtime work or working two shifts. However, this would also entail additional variable cost because of the overtime pay that must be given to them. If we assume that the workers have not yet maximized their full potential, their productivity can still improve. The company can offer incentives to increase their