This lesson illustrates two situations in which a firm in a perfectly competitive market is earning economic losses. In one case, the losses are less than the firm's total fixed costs. In another, the firm's losses exceed its fixed costs, meaning the firm is better off shutting down. Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! http://econclassroom.com/?page_id=5870