● However in the short run a firm may sell a product at a loss. This may be to gain market share or because the product is still at the introduction phase and has high research and launch costs. 3
● Overall it depends on whether we are considering a short or long term pricing policy. Firms may be willing to make a loss in the short run. It will also depend on the objectives of the firm. Some public sector organisations, e.g. may simply try to cover costs.
