If the price is greater than the average variable cost and less than the average total cost at the profit-maximizing quantity of output in the short run,a perfectly competitive firm will:

A) continue to produce at an economic loss.
B) earn an economic profit.
C) encourage other firms to enter the industry.
D) produce more than the profit-maximizing quantity.

Economic Loss

The negative difference between a company's revenues and its expenses, including opportunity costs.

Average Variable Cost

The total variable costs divided by the quantity of output produced; it varies with production levels.

Average Total Cost

The total cost of production divided by the total quantity produced; a measure of per-unit production cost.