Final answer:
In perfect competition, a short run decision for a business is determining the levels of output to maximize profits, with longer-term entry or exit decisions responding to profitability and market conditions over time. Therefore, the correct option is B.
Step-by-step explanation:
Under perfect competition, the short run decision that a business has to make is about the levels of output that can maximize profits. In the short run, firms are faced with certain fixed costs and are producing with at least one fixed input. Their main concern is to find the quantity of output where profits are highest or, if that is not possible, where losses are minimized. Unlike short run decisions, whether to enter or exit an industry, spending on advertising, and deciding the price to charge buyers are typically considered long run decisions. Entry and exit decisions are related to long-term profitability and market conditions that affect the firm's ability to compete over time.
In the long run, firms react to economic profits and losses. Profits tend to attract new firms into the industry, increasing competition, while losses prompt existing firms to exit. This eventually leads to a zero-profit equilibrium where no new firms wish to enter and no existing firms want to leave, as profits have been normalized due to the competitive nature of the market.