Why would a firm keep producing even though it is losing money? If the price is greater than the minimum average total cost, the firm will cover some of all its variable costs and lower its losses by paying off some of its fixed costs. If the price is less than the minimum average variable cost, the firm will cover all its variable costs and pay off all of its fixed costs. If the price is less than the minimum average variable cost, the firm will cover all its variable costs and pay off some of its fixed costs. If the price is greater than the minimum average variable cost, the firm will cover all its variable costs and pay off some of its fixed costs