A Firm Should Continue to Operate Even at a Loss

question 15

Multiple Choice

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.

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Definitions:

Marketing

The business process of identifying, anticipating, and satisfying customers' needs and wants through creating, offering, and exchanging products of value.

Operations

The day-to-day activities involved in running a business, especially those related to production and delivery of goods and services.

Seasonal Demand

The fluctuation in consumer demand for particular products or services at different times of the year, influenced by seasons and holidays.

Manufacturing Capacity

The maximum amount of products that can be produced in a manufacturing facility within a given timeframe, considering the limitations of resources and space.