A firm should continue to operate even at a loss in the short run if
A)its output is above the break-even point.
B)its revenues are less than its fixed costs.
C)it can cover its variable costs and some of its fixed costs.
D)it has some fixed costs that cannot be brought down to zero.

Question

Quizplus · Accepted Answer

In the short run, a firm should continue to operate if it can cover its variable costs and contribute something towards fixed costs, as shutting down would mean incurring the full fixed costs without any revenue.

A Firm Should Continue to Operate Even at a Loss