Identify why a firm that incurs losses choose to produce rather than shut down.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 8, Problem 1RQ

To determine

Identify why a firm that incurs losses choose to produce rather than shut down.

Expert Solution & Answer

Explanation of Solution

The economic loss is a situation that occurs when the total revenue of the firm is less than the total cost of the firm. However, the firms will be ready to accept the losses rather than shut down in the short run. This is because the total cost is the sum total of variable cost and the fixed cost. In the short run, if the total revenue is greater than the variable cost and less than the total cost of the firm, then the losses incurred by the firm would be minimized. Thus, even though the firm faces loss in the short run, it would operate rather than shut down the production.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Why would a firm that incur choose to produce rather than to shut down?

Why would a firm that is making loss in the short-run choose to operate rather than shut down?

Many firms in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down?

Answer 2

Question

Chapter 8, Problem 1RQ

To determine

Identify why a firm that incurs losses choose to produce rather than shut down.

Expert Solution & Answer

Explanation of Solution

The economic loss is a situation that occurs when the total revenue of the firm is less than the total cost of the firm. However, the firms will be ready to accept the losses rather than shut down in the short run. This is because the total cost is the sum total of variable cost and the fixed cost. In the short run, if the total revenue is greater than the variable cost and less than the total cost of the firm, then the losses incurred by the firm would be minimized. Thus, even though the firm faces loss in the short run, it would operate rather than shut down the production.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 8, Problem 1RQ

To determine

Identify why a firm that incurs losses choose to produce rather than shut down.

Expert Solution & Answer

Explanation of Solution

The economic loss is a situation that occurs when the total revenue of the firm is less than the total cost of the firm. However, the firms will be ready to accept the losses rather than shut down in the short run. This is because the total cost is the sum total of variable cost and the fixed cost. In the short run, if the total revenue is greater than the variable cost and less than the total cost of the firm, then the losses incurred by the firm would be minimized. Thus, even though the firm faces loss in the short run, it would operate rather than shut down the production.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 8, Problem 1RQ

To determine

Identify why a firm that incurs losses choose to produce rather than shut down.

Expert Solution & Answer

Explanation of Solution

The economic loss is a situation that occurs when the total revenue of the firm is less than the total cost of the firm. However, the firms will be ready to accept the losses rather than shut down in the short run. This is because the total cost is the sum total of variable cost and the fixed cost. In the short run, if the total revenue is greater than the variable cost and less than the total cost of the firm, then the losses incurred by the firm would be minimized. Thus, even though the firm faces loss in the short run, it would operate rather than shut down the production.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 1RQ

To determine

Identify why a firm that incurs losses choose to produce rather than shut down.

Expert Solution & Answer

Explanation of Solution

The economic loss is a situation that occurs when the total revenue of the firm is less than the total cost of the firm. However, the firms will be ready to accept the losses rather than shut down in the short run. This is because the total cost is the sum total of variable cost and the fixed cost. In the short run, if the total revenue is greater than the variable cost and less than the total cost of the firm, then the losses incurred by the firm would be minimized. Thus, even though the firm faces loss in the short run, it would operate rather than shut down the production.

Answer 6

Chapter 8, Problem 1RQ

To determine

Identify why a firm that incurs losses choose to produce rather than shut down.

Expert Solution & Answer

Explanation of Solution

The economic loss is a situation that occurs when the total revenue of the firm is less than the total cost of the firm. However, the firms will be ready to accept the losses rather than shut down in the short run. This is because the total cost is the sum total of variable cost and the fixed cost. In the short run, if the total revenue is greater than the variable cost and less than the total cost of the firm, then the losses incurred by the firm would be minimized. Thus, even though the firm faces loss in the short run, it would operate rather than shut down the production.

Answer 7

Chapter 8, Problem 1RQ

To determine

Identify why a firm that incurs losses choose to produce rather than shut down.

Answer 8

Expert Solution & Answer

Explanation of Solution

The economic loss is a situation that occurs when the total revenue of the firm is less than the total cost of the firm. However, the firms will be ready to accept the losses rather than shut down in the short run. This is because the total cost is the sum total of variable cost and the fixed cost. In the short run, if the total revenue is greater than the variable cost and less than the total cost of the firm, then the losses incurred by the firm would be minimized. Thus, even though the firm faces loss in the short run, it would operate rather than shut down the production.