Final answer:
In the short run, a firm's price can result in the firm shutting down, staying in business, or incurring losses.
Step-by-step explanation:
In the short run, a firm's price can experience three outcomes:
- If the price is less than the minimum average variable cost, the firm will shut down as it cannot cover its variable costs.
- If the price is greater than the minimum average variable cost, the firm will stay in business as it is able to cover its variable costs and potentially earn profits.
- If the price is between the minimum average variable cost and the shutdown point, the firm will continue operating but will incur losses in the short run.