A firm could continue to operate for years without ever earning a profit as long as it is producing an output where

a. atc > avc.

b. mr > avc.

c. mr < atc.

d. afc < avc

A firm could continue to operate for years without ever earning a profit as long as it is producing an output where

B. MR >AVC

MR stands for marginal revenue which is the sale price of a single item sold. On the other hand, AVC or the average variable cost is the firm’s variable costs divided by its output that is produced.