If a firm's minimum point on the ATC curve is $15 and on the AVC curve is $10, what is the firm's optimal strategy in the short run if the market price is $12 and it is producing where MR = MC?

Question

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In the short run, if the market price ($12) is above the average variable cost ($10) but below the average total cost ($15), the firm should continue producing where marginal revenue (MR) equals marginal cost (MC) to minimize losses. Shutting down would result in higher losses equal to the total fixed costs, whereas continuing production allows the firm to cover some fixed costs.

If a Firm's Minimum Point on the ATC Curve Is