Why would a firm stay open if it's losing money? If price is above average variable cost and below average total cost and the firm is losing money why would it stay open?  The firm can pursue other...

Why would a firm stay open if it's losing money?

If price is above average variable cost and below average total cost and the firm is losing money why would it stay open?  The firm can pursue other opportunities,why would it stay in a failing business?

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readerofbooks eNotes educator | Certified Educator

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A firm may stay open, even if it losing money, in the hopes that it will gain money in the long run. In fact, it seems to me at least, all firms start this way. They put the money down and they have hope that in a certain amount of year they will be profitable. For instance, a relative of mine is in venture capital and he offers money with the hopes of great returns in the long run. In the short run, he may lose it all.There may be other...

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