What action might perfectly competitive firms making economic losses take in the short run?

Question

Quizplus · Accepted Answer

In the short run, perfectly competitive firms that are making economic losses may choose to shut down rather than continue producing. This is because total revenue is not covering variable costs and continuing to produce would mean incurring further losses. Shutting down allows the firm to minimize its losses and reevaluate its strategy for the long run. Producing, expanding, or advertising would only worsen the losses in the short run.

What Action Might Perfectly Competitive Firms Making Economic Losses Take