Explain why any firm must generate enough revenue to cover its variable costs in the short run

What will be an ideal response?

The reason is that if it can't cover its variable cost it is better off for the firm to shut down. At least under this circumstance the maximum amount the firm would lose would be an amount equal to its fixed costs. However, if a firm continued to produce even while revenues were short of variable costs this would result in greater losses than the losses associated with shutting down.