If a firm is operating at an output level where losses are minimized,the firm
A)has no incentive to stay in the industry.
B)is better of exiting the industry.
C)is maximizing profits.
D)will shut down.

Question

Quizplus · Accepted Answer

If a firm is operating at an output level where losses are minimized, it means that its total revenue is covering all its variable costs, and the firm is at its break-even point. At this point, the firm is not making any profit, but it is also not making any losses. Therefore, the best choice is to continue operating at this output level, as it is maximizing its profits by covering all its variable costs. Exiting the industry or shutting down would only result in more losses.

If a Firm Is Operating at an Output Level Where