A firm suffering short-run losses will continue to operate rather than shut down when price is less than its average variable costs.

Name: A firm suffering short-run losses will continue to operate rather than shut down when price is less than its average variable costs.
Brand: Quizplus
Rating: 4.9 (41 reviews)

Question

Quizplus · Accepted Answer

A firm will continue to operate in the short run as long as the price covers its average variable costs, even if it's suffering losses. If the price falls below average variable costs, the firm is better off shutting down temporarily.

A Firm Suffering Short-Run Losses Will Continue to Operate Rather