Market demand and short-run market supply determine the market price and market output. Changes in demand bring changes to short-run market equilibrium. In short-run equilibrium, although the firm produces the profit maximizing output, it does not necessarily end up making an economic profit. It"s all based on if price is less than, more than, or equal to atc in the equation: Economic profit/loss = (price atc) x q. In short-run equilibrium, a firm might make an economic profit, incur an economic loss or break even. Only one of these 3 situations is a long-run equilibrium because in the long-run firms can enter/exit the market. Entry new firm(s) enter a market and the total number of firms increases. Exit existing firm leaves market and the total number of firms decreases. Firms enter a market because existing firms are incurring economic profit and exit a market if they"re incurring economic loss.