For the most recent financial reporting period, a London-based business has revenue of GBP2 million and TC of GBP2.5 million, which are or can be broken down into TFC of GBP1 million and TVC of GBP1.5 million. The net loss on the firm’s income statement is reported as GBP500,000 (ignoring tax implications). In prior periods, the firm had reported profits on its operations. 

1. What decision should the firm make regarding operations over the short term? 

2. What decision should the firm make regarding operations over the long term? 

3. Assume the same business scenario except that revenue is now GBP1.3 million, which creates a net loss of GBP1.2 million. What decision should the firm make regarding operations in this case?