Earning a loss occurs when a firm's total costs exceed its total revenue. In other words, the expenses of producing and selling goods or services are higher than the income generated from sales.
Related terms
Total revenue: The total amount of money received from selling goods or services.
Fixed costs: Costs that do not vary with changes in production levels, such as rent or insurance.
Variable costs: Costs that change with different levels of production, like raw materials or labor.