Firm suffering from Lost

Firms can suffer economic losses in the short run. An economic loss is the situation in which a firm's total revenue is less than its total cost, including all implicit costs. As long as price is above average variable cost, a firm suffering a loss will continue to produce in the short run.

Firms can suffer economic losses in the short run. An economic loss is the situation in which a firm's total revenue is less than its total cost, including all implicit costs. As long as price is above average variable cost, a firm suffering a loss will continue to produce in the short run.

How do you calculate firm loss?

Conversely, if the price that a firm charges is lower than its average cost of production, the firm's profit margin is negative and it is suffering an economic loss.
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Table 1. Profit and Average Total Cost
If…	Then…
Price = ATC	Firm earns zero economic profit
Price < ATC	Firm earns a loss Firms will not immediately stop production if the firm becomes unprofitable. As long as the loss is less by operating than by stopping production the firm will continue to produce even though it is incurring a loss; that is, total revenue is greater than total variable cost, but total revenue is less than total cost.