Which will be true for a monopolistic competitor experiencing short-run losses?

Question

Quizplus · Accepted Answer

In the short run, a monopolistic competitor will continue to produce as long as price covers average variable costs (AVC), even if total costs (TC) are not covered. Therefore, in the short run, if P < ATC, the firm is experiencing losses but will continue to produce as long as P > AVC. If P > ATC, the firm is making profits. Therefore, option C is correct.

Which Will Be True for a Monopolistic Competitor Experiencing Short-Run