If revenues are greater than total variable costs of production but less than total costs, a firm
A) earns a profit.
B) suffers a loss.
C) breaks even.
D) shuts down.

Question

Quizplus · Accepted Answer

When revenues exceed total variable costs but are less than total costs, the firm is covering its variable costs and contributing towards its fixed costs, but it is not covering all of its costs, leading to a loss.

If Revenues Are Greater Than Total Variable Costs of Production