A firm should always continue to operate at a loss in the short run if:

Question

Quizplus · Accepted Answer

If a firm can cover its variable costs and some of its fixed costs, it may be able to stay in business in the short run even if it is operating at a loss. This is because the firm is still generating revenue that can be used to pay some of its fixed costs, which could include expenses like rent or salaries for employees. However, if the firm cannot cover any of its costs, it may not be sustainable to continue operating at a loss. The other choices (A, B, and D) do not provide sufficient justification for why a firm should continue operating at a loss in the short run.

A Firm Should Always Continue to Operate at a Loss