Question

Why are firms willing to accept losses in the short run but not in the long​ run?.

Answer 1

Due to fixed costs. The major distinction between the short and long term is that enterprises in the short run suffer fixed expenses, many of which are expenses incurred (not recoverable). If a company suffers losses in the short run, it might suspend operations and quit. At that point, the firm's variable cost will be $0. Total cost, on the other hand, comprises Fixed Costs, which are costs that the business has already incurred.

Step-by-step explanation: