When the total revenue earned by a firm is less than the total cost of production the firm faces a(n)

When a firm's total revenue (TR) is less than its total cost (TC) of production, the firm is facing a loss. This situation implies that the firm is not able to cover its production costs with the revenue generated from its sales. In economic terms, a loss occurs when:

$\text{Total Revenue} < \text{Total Cost}$

In this scenario, the firm's financial performance is ineffective because it is operating at a deficit. This situation is critical for decision-making, as the firm might need to evaluate its operational efficiency, pricing strategies, or market conditions to avoid continuing losses in the long term. If a firm consistently operates at a loss, it might consider adjusting its business model, cutting costs, or even exiting the market.