A firm suffering short-run losses will continue to operate rather than shut down when price is less than its average variable costs.

Short-Run Losses

Financial deficits experienced by a business or project within a brief period, often due to initial start-up costs or market fluctuations.

Average Variable Costs

Costs that vary with output level, calculated by dividing total variable costs by the quantity of output produced.

Operate

To function or work in a particular manner, often referring to businesses and machinery performing their intended duties.