A small manufacturing firm produces 100 units of a product per month. The market price for the product has recently fallen to $40 per unit. The firm's total monthly fixed costs are $3,000, and its total monthly variable costs are $2,500. The manager reviews the numbers and decides to cease all production immediately, stating, 'Our total cost per unit is ($3,000 + $2,500) / 100 = $55. Since we are losing $15 on every unit we sell, the only logical action is to shut down to prevent further losses.' Evaluate the manager's decision and reasoning.
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