In the short run, a firm that is incurring losses would always be better off if it keeps producing.

Question

Quizplus · Accepted Answer

If a firm is incurring losses in the short run, it would be better for the firm to shut down production and minimize losses rather than continuing production and incurring more losses. In the short run, fixed costs cannot be adjusted, so continuing production will only add to the variable costs and increase losses.

In the Short Run, a Firm That Is Incurring Losses