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Fact 12.2.1 Chevy Volt Production Temporarily Shut Down
GM will temporarily lay off 1,300 employees as the company stops production of the electric car, Chevy Volt, for five weeks. GM had hoped to sell 10,000 Volts last year, but ended up selling just 7,671. It plans to maintain inventory levels by adjusting production to match demand.
Source: Politico, March 2, 2012
-Refer to Fact 12.2.1. The shutdown decision maximizes GM's economic profit (or minimizes its loss)when price is less than

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GM will temporarily lay off 1,300 employees as the company stops production of the electric car, Chevy Volt, for five weeks. This means that GM is not producing any Volts during this time, so its total variable cost is zero. The shutdown decision maximizes GM's economic profit (or minimizes its loss) when price is less than average variable cost, because GM is not incurring any variable costs during the shutdown.

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