In the short run, a perfectly competitive firm earning negative economic profit

Answer is C. HOWEVER,

If you draw the graph with AVC, MC on it, and when firms are making negative economic profit, they never exist on the upward-sloping portion of its AVC,

Can anyone explain graphically?

A) is on the downward-sloping portion of its AVC.

B) is at the minimum of its AVC.

C) is on the upward-sloping portion of its AVC.

D) is not operating on its AVC.

E) can be at any point on its AVC.