If total revenue is greater than variable costs but less than total costs, a firm should remain in operation because its revenue is sufficient to cover variable costs and some fixed costs.

Question

Quizplus · Accepted Answer

If the total revenue is enough to cover variable costs, it means that the firm is making a contribution towards its fixed costs as well. Therefore, the firm should remain in operation as long as it can cover its variable costs.

If Total Revenue Is Greater Than Variable Costs but Less