If a firm is producing where price exceeds average variable cost, the firm should continue production even though it may incur a loss, since

a. it must adhere to union rules against layoffs.

b. it is important to show stockholders that the company can turn itself around.

c, it can cover its variable costs (payroll, utilities, etc.) and have some funds left over to apply toward paying fixed costs.

d. the loss will quickly revert to a profit.