Perfect Competition (Part 3): Short-Run Losses

Perfectly competitive firms can make losses in the short-run. The relationship between the price (i.e. the per-unit revenue) and the average variable costs (AVC) is of critical importance. A firm will not supply any of a good, even in the short-run, if the price is less than the average variable costs. If this is the case, it is better for a firm to shut-down (i.e. losses will be minimized). This video is made for 1st year college students or AP/IB Economics students. It focuses on foundational economic concepts.

[@mapanichij2803]

Good keep it up