AeroGreens Ltd, a high-tech vertical farming startup, reported a net loss of £350,000 in its second year of operation. Despite this, the company continued to run its automated LED-lit hydroponic trays and deliver microgreens to premium local restaurants.
Explain one condition under which a loss-making firm, such as AeroGreens, might continue to operate in the short run.
6 exam-style questions on Edexcel A A Level Economics 3.3.4 Normal profits, supernormal profits and losses. Each one has a worked solution and a mark scheme showing where the marks go.