“I am making a loss, but with the rent I have to pay, I can't afford to shut down at this point of time.” If this entrepreneur is attempting to maximize profits or minimize losses, his behaviour in the short run is: (a) rational, if the firm is covering its variable cost. . (b) rational, if the firm is covering its fixed costs. (c) irrational, since plant closing is necessary to eliminate losses. (d) irrational, since fixed costs are eliminated if a firm shuts down
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heya mate
the rational property is most important so part b
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Answer:A
Explanation:If the firms revenue is covering average variable cost then there is no need to shutdown the firm, even if the firm is shutdown the person has to pay fixed cost
Fixed cost is a factor which has to be paid continuously.
Here that person is covering its average variable cost(not mentioned in question) but we have to assume that he is covering his AVC and he is running in short run then there may be profit in near future very soon. So he has to wait till that so he can pay off his rent.
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