If a firm's short-run total cost curve lies above its total revenue curve at all output levels,the goal of the firm should be to
A)minimize total cost
B)maximize total revenue
C)minimize its loss
D)minimize marginal cost
E)maximize marginal revenue

Question

Quizplus · Accepted Answer

If a firm's short-run total cost curve lies above its total revenue curve at all output levels, this means that the firm is incurring losses. Therefore, the goal of the firm should be to minimize its loss, which can be done by producing at the output level where the marginal cost equals the marginal revenue, even if this output level is lower than the one that maximizes total revenue. The firm may also consider reducing fixed costs or exiting the market in the long run if the losses persist.

If a Firm's Short-Run Total Cost Curve Lies Above Its