If a perfectly competitive firm is incurring losses in the short run,it _____

Question

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In the short run, a perfectly competitive firm will continue to operate if its revenue covers its variable costs, even if it is incurring losses. This is because shutting down would incur additional losses equal to its fixed costs, whereas operating allows the firm to at least cover some of its costs. In the long run, however, if a firm cannot cover its total costs (including fixed costs) it will exit the market.

If a Perfectly Competitive Firm Is Incurring Losses in the Short