The purely competitive firm can maximize its economic profit (or minimize its loss) only by adjusting its output.
Can a purely competitive firm earn economic profit in the short run?
Businesses can only make money or lose money in a market that is perfectly competitive in the near term. Profits and losses are ultimately eliminated because an endless number of businesses produce uniform, infinitely divisible items.
When should a purely competitive firm produce in the short run?
If a corporation is purely competitive and its total revenue is more than its entire variable costs, it should produce in the near term. If P > ATC, a purely competitive firm will always turn a short-term economic profit.
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