Price must be greater than or equal to AVC in the short run? Explain.

Every firm wish to earn  supernormal or normal profit in the short run.howeverever if the demand and cost conditions are not favourable then the firm incurs losses in the short run,now the question is what is the tolerable limit of loss for the firm in the short run for it exsistence in the production process.Here  the price obtained by selling the product must be either equal to the AVC or greater then AVC,the reason for sacrificing the AFC part of the cost is that the firm has start it production process in the short run he doesnot want to lose the oppurtunity of the long run where if the demand or cost condition might be favourable in earning profit for him.however if the same condition prevail in the long run he will stop the production.Thus P< AVC is theshut down point for the firm.

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