"I'm Losing Money, but Having Invested So Much in Equipment

Multiple Choice

"I'm losing money, but having invested so much in equipment, I simply cannot afford to shut down." If the firm were attempting to maximize profit, this decision may be

A) correct if the firm is covering its fixed costs.
B) incorrect because a firm experiencing economic losses should never continue to operate.
C) correct if the firm is covering its variable costs and expects the price of its product to rise in the near future.
D) incorrect since the firm's fixed costs are sunk costs.