Question

when will a producer be in equilibrium in case of losses?

Answer 1

In case of perfect competition, in short run a firm would be earning normal losses if minimum of SAC > Price ≥ minimum of SAVC. In this particular case, the prevailing market price is so low that firm is not able to cover its fixed costs fully (as price is below the minimum of SAC) but the firm is able to cover its variable costs (as the price is above the minimum point of SAVC). If the price falls even below SAVC the firm will shut-down as in this case the firm would not be able to cover even the variable cost.
 

Answer 2

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In case a firm is incurring losses, the producer will reach its equilibrium at the point where the price is equal to or greater than the minimum of short run average variable cost curve (SAVC). This is because if a producer is incurring losses then he must be selling his product at a price lower than the minimum of SAVC. Thus, in order to reach equilibrium, he will have to sell the output at a price that is equal or greater than the minimum of SAVC.