In the short run,each firm in a perfectly competitive market is free to

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In the short run, each firm in a perfectly competitive market has a fixed plant size and cannot change it. Therefore, option A and E can be ruled out. Additionally, since the market is perfectly competitive, each firm has no control over the market price and must accept it as given. Hence, setting a price above the market price is not possible. Lastly, exiting the industry without losses would only be possible in the long run, after all sunk costs have been recovered. Therefore, option C is not the best choice. The only feasible option left is to vary the firm's output level within its existing capacity. This is because the variable costs of production are lower than the market price, allowing the firm to make a profit by producing more units. As long as the revenue from selling an additional unit exceeds the variable cost, the firm will continue to produce more.

In the Short Run,each Firm in a Perfectly Competitive Market