China Wheat Gluten Possibly Tainted

In the United States recently, there has been pets dying of food contamination. This is believed to be the result of tainted wheat gluten. If this is true, there is a possibility of the company facing a lengthy future in the legal system. While this occurs, the company's sales quantities will drop due to their shaky record. Since they will not be selling as much goods, their profits will decrease.
With these events occurring, the company will definitely have to make some hard economic decisions. There is a possibility that the company will not produce enough to cover their cost. If this occurs, they will have to decide weather t stay open or to close as well as to decide if these decisions should have long term or short term consequences. As long as the company is making enough total revenue to cover their variable costs, they should continue to stay open. Once they can no longer cover their variable costs they will be forced to close their operation.