A perfectly competitive firm will continue producing in the short run as long as it can cover its:

Question

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A perfectly competitive firm will continue producing in the short run as long as it can cover its average variable costs. This is because in the short run, a firm cannot change its fixed costs and must continue to pay them regardless of their level of production. Thus, a firm will only continue to produce if it is able to generate enough revenue to cover its variable costs, which are the costs that vary with the level of output. Once a firm can no longer cover its average variable costs, it will shut down production in the short run.

A Perfectly Competitive Firm Will Continue Producing in the Short