If Price Is Less Than Its Minimum Average Variable Cost

Multiple Choice

If price is less than its minimum average variable cost, a perfectly competitive firm that continues to produce in the short run

A) cannot cover any of its variable cost
B) incurs a loss greater than its fixed cost
C) can cover all of its fixed cost and some of its variable cost
D) can cover all of its variable cost and some of its fixed cost
E) can cover both its fixed costs and its variable cost