Delta Truss in Cadillac [Michigan] is shutting down and temporarily discontinuing truss production. Workers fear this temporary shutdown will become permanent, but the firm announced that it anticipates that production will resume when the spring business begins.
a. Explain how the shutdown decision will affect Delta Truss’ TFC, TVC, and TC.
b. Under what conditions would this shutdown decision maximize Delta Truss’ economic profit (or minimize its loss)?
c. Under what conditions will Delta Truss start producing again?