Why would a firm decide to produce a positive quantity of a output even though it makes negative profits by doing so?

Question

Quizplus · Accepted Answer

If the price is high enough to cover the average variable cost, then the firm would still be able to pay for the cost of producing each unit of output. Even though the firm is making negative profits, it is still able to cover its variable costs and avoid immediate bankruptcy or shutdown. In the short run, the firm may opt to continue producing in hopes of earning positive profits in the future, or to maintain a presence in the market. Alternatively, the firm may be operating as a non-profit organization or pursuing social or environmental goals that do not prioritize maximizing profits.

Why Would a Firm Decide to Produce a Positive Quantity