If a firm's short-run total cost curve lies above its total revenue curve at all output levels,the firm should
A)always shut down in the short run
B)always operate in the short run
C)operate in the short run if the maximum operating loss is less than its total fixed cost
D)operate in the short run if the minimum operating loss is less than its total fixed cost
E)operate in the short run if the average operating loss is less than its total fixed cost

Question

Quizplus · Accepted Answer

If the minimum operating loss (total revenue minus total cost) is less than the total fixed cost, the firm can cover some of its fixed costs and minimize losses by continuing to operate in the short run.

If a Firm's Short-Run Total Cost Curve Lies Above Its