For this week’s discussion, I want you to think about Major League Baseball! The owners of the major league teams are arguing that they may have to shut the season down unless the players agree to a significant salary cut. If the players agree, the owners will be able to play games this season.
Using this information as a guide, explain loss-minimization and shut down cases for perfectly competitive firms. Explain why baseball owners may have to resort to a shut-down case and why they may be able to use a loss-minimization case.
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