Bravo Pork Rinds Case
Suppose you’re the plant manager for Bravo Pork Rinds, which manufactures pork products in a market which approximates perfect competition. Due to the slow economy, business has been slow and you’re losing money every month. The owners have asked you whether to continue operations or to shut down at least till the economy enhances. You’ve the following information available:
Marginal Revenue (MR) = $105
Total Cost (TC) = $1,200 + 135Q – 0.6Q2
Marginal Cost (MC) = 135 – Q
As a plant manager, should you suggest to the owners that the plant be shut down for a while? Justify your answer by using at least two methods and presenting the information graphically.