In short-run equilibrium in a perfectly competitive market,

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In the short-run equilibrium of a perfectly competitive market, each firm takes the market price as given. This is because the market price is determined by the intersection of the market demand and supply curves, and each firm has no control over the market price. Firms may earn economic profit, normal profit, or incur losses depending on their average total cost and the market price, but the market price is always taken as given by the firm. If the market price falls below the average variable cost, then firms may shut down, but this is not always the case.

In Short-Run Equilibrium in a Perfectly Competitive Market