How do you know if a firm will be able to keep producing in the short run or even in the long run??

Question

This is for microecon and we're learning cost of production..

Answer 1

They have to have access to raw materials.

They have to have capital to pay for the materials.

They can borrow to pay for materials, but they can't borrow so much that they are losing money.

They can't pay more in wages than they take in.

They can't pay more in taxes than they make in profits.

They have to be close enuf to their customers to deliver the goods quickly and at a cheap price.