"The segment of a competitive firm's marginal$-$cost curve that lies above its AVC curve constitutes the firm's short$-$run supply curve."

This is because the firm wants to produce a profit maximizing output level such that

Multiple Choice

price equals marginal cost. If the price is less than the AVC, the firm's losses exceed fixed costs and the firm should not produce.

price equals average cost. If the price is less than the marginal cost, the firm's losses exceed fixed costs and the firm should not produce.

price equals average cost. If the price is less than the ATC, the firm's losses exceed fixed costs and the firm should not produce.

price equals marginal cost. If the price is less than the marginal cost, the firm's losses exceed total costs and the firm should not produce.