STEPS TO WRITE ESSAY 💡MAIN POINTS💡OVERVIEW

I. Introduction
A. Explanation of the concept of a loss-making firm
B. Thesis statement outlining the two reasons why a loss-making firm may continue to produce

II. Reason 1: Expectation of future improvement
A. Explanation of why a firm may not expect the loss to last
B. Discussion of how a firm may think demand will rise or costs will fall in the future
C. Examples of firms that have continued to produce despite losses due to this reason

III. Reason 2: External factors
A. Explanation of how a firm may be subsidised by the government
B. Discussion of how a firm may lower prices to drive out competitors or increase market share
C. Examples of firms that have continued to produce despite losses due to external factors

IV. Other reasons for a loss-making firm to continue to produce
A. Explanation of how a firm may accept losses in the short-term to expand in the long-term
B. Discussion of how a firm may have high retained profits to cover losses
C. Explanation of how a new firm may be in the process of growth or trying to survive
D. Discussion of how a firm's main objective may not be profit maximisation

V. Conclusion
A. Recap of the two reasons why a loss-making firm may continue to produce
B. Final thoughts on the importance of understanding why firms continue to produce despite losses.