the revenue from selling the shirt, the business would produce the shirt anyway if the revenue were greater than the variable cost. If the revenue that it is receiving is greater than its variable cost but less than its total cost, it will continue to operate while accruing an economic loss. If its total revenue is less than its variable cost in the short run, the business should shut down. If revenue is greater than total cost, this firm will have positive economic profit.

Variable costs over time

Over a one-day horizon, a factory's

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