Final answer:
In short-run equilibrium, a purely competitive firm could be earning any level of economic profit, but in the long-run, competition will force firms to earn zero economic profits.
Step-by-step explanation:
The true statement about a purely competitive firm in short-run equilibrium is that it can be earning positive, zero, or negative economic profit. However, in the long run, positive economic profits attract competition as other firms enter the market, which decreases the original firm's demand and marginal revenue. Conversely, economic losses lead to firms exiting the market. When no new firms want to enter and no existing firms want to leave, the market in long-run equilibrium will have firms earning zero economic profits, meaning that a firm's accounting profit is equal to what its resources could earn in their next best use.
In short-run equilibrium, if a purely competitive firm's price is above average cost, it's earning positive economic profit. If the price is equal to average cost, it's earning zero economic profit, and if the price is below average cost, the firm is facing losses. The profit-maximizing level of output in the short run is where marginal cost equals marginal revenue. This is different from the long-run perspective, where firms may only earn zero economic profit due to the entry and exit of firms in the market.