Refer to the accompanying figure to answer the following questions.

-A firm would be suffering a loss but still be producing if the price is

Question

Refer to the accompanying figure to answer the following questions.
 
-A firm would be suffering a loss but still be producing if the price is

Quizplus · Accepted Answer

A firm might continue producing in the short run even at a loss if the price covers the variable costs but not the total costs. The price range given in option B suggests that the firm covers its variable costs (above $4) but not its total costs (below $5), hence it's operating at a loss but still producing.

Refer to the Accompanying Figure to Answer the Following Questions