You’ve been hired by an unprofitable firm to determine whether it should shut down its operation. The firm currently uses 70 workers to produce 300 units of output per day. The daily wage (per worker) is ETB 100, and the price of the firm's output is ETB 30. The cost of other variable inputs is ETB 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. You know that the marginal cost of the last unit is ETB 30. Should the firm continue to operate at a loss? Carefully explain your answer.

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You’ve been hired by an unprofitable firm to determine whether it should shut down
its operation. The firm currently uses 70 workers to produce 300 units of output per
day. The daily wage (per worker) is ETB 100, and the price of the firm's output is
ETB 30. The cost of other variable inputs is ETB 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. You know that the marginal cost of the last unit is ETB 30.
Should the firm continue to operate at a loss? Carefully explain your answer.

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