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Answer to Question #46342 in Microeconomics for irfan

Question #46342
Can a firm continues its operation in the short run despite losing? Explain.
Expert's answer
Yes, if firm adheres to the rules of acceptable loss, that assumes losses which do not exceed the sum of the fixed costs. In this case, the firm operates in choosing the optimal level of production to minimize its losses, where MR (marginal revenue) = MC (marginal costs). 

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