If a purely competitive firm shuts down in the short run:

A) its loss will be zero.
B) it will realize a loss equal to its total variable costs.
C) it will realize a loss equal to its total fixed costs.
D) it will realize a loss equal to its explicit costs.

Purely Competitive

A market setup where many small companies exist, offering an identical product, with low barriers to both entering and leaving the market.

Economic Losses

The reduction in wealth or welfare due to factors such as poor investment decisions, market downturns, or natural disasters.

Short Run

A period in economics during which some resource inputs in a production process cannot be changed.