Why may a firm continue to operate even if it is making losses In the Short run Or Why may a firm continue to operate between the break even and shut down points? OR Why may a firm keep an operating even if it is not covering the total costs of production?

Under perfect competition,    a firm may keep on operating   even if it is making losses because   of the following reasons.

1. The firm   may  keep  on  operating if it  has the hope of getting  a loan (financial   assistance)   from financial  institutions   so as to improve  on its production   activities  and earn profits  in the long  run.
2. If the firm is government owned and it is providing essential commodities to the society.   For example the firm supplying   water or electricity, it keeps on operating at a loss due to the nature of the services it provides to the society.
3. When the entrepreneur   has invested a lot of assets in business, he may be reluctant   sell them off and as a result, he may continue to operate at a loss.
4. The firm may continue to operate due to the fear losing its cheap source of raw materials.
5. It  may   continue   to  operate  so  long  as  it  covers  its  variable  costs  which   are  inevitable    in production.   For example the costs of raw materials.
6. The firm may continue   to operate due to the fear of losing the already established market for   its commodities.
7. It may keep on operating   with the hope of getting another strategic location where it can attract more customers and minimize   on the costs of production.
8. The  entrepreneur   may  want to maintain  his reputation  and good image to the  public  and  this forces him to continue  operating  even if he is making  losses.
9. A firm may keep on operating if it expects to enjoy economies of large scale in the long run and earn more profits e.g. marketing   and technical internal economies   of scale.
10. If the goal of the firm is to provide employment to the society, a firm a may keep on operating even if it is incurring losses.
11. If the firm is surviving on the super normal profits made in the past,  it may  keep  on operation even if it is making  losses.
12. When the firm is newly  established, it may  keep  on  operating   with  the  hope  of  getting   more profits  in future  as it expands.
13. If the firm is a subsidiary of another profit making firm, it may keep on operating when   it is covered by the main firm.
14. The losses made may be seasonal when the firm expects to make super normal profits in other seasons.
15. The firm may have hopes of emerging with another prosperous firm so as to enjoy economies of large scale
16. When the entrepreneur    has  the  hope  of  changing  the management   and administration   which has caused  losses  in the short run, the firm may  keep  on operating  even  if it is making  losses.
17. If the entrepreneur expects   to  use better techniques  of production   which   may  allow   him   to minimize  the costs  and  earn more  profits  in the  long  run, the  firm  may  keep  on operating   in the short run.
18. The owner of  the  firm  may  want to prevent  his vital skilled manpower  from  shifting   to  other firms.  This is   because   if it shifts,   it becomes   extremely   difficult   and expensive   to mobilize    it back.
19. For fear to loss an established name