Answer in Microeconomics for Michael NKANTA #173762
Suppose a monopolistic firm is making loss in the short-run ,can the firm continued to stay in business. Explain
The firm will continue to stay in business or shutdown temporarily depending on its decision.
If the price exceeds average variable costs then the firm should continue to operate in the short run. The firm will not go out of business because if the market conditions improve then the firm can resume production.