In a perfect competition scenario, each firm is a price taker, meaning it takes the market price as given and cannot influence it.
In economic theory, a perfect competitor is a hypothetical market structure characterized by several key assumptions, including the presence of many small firms producing identical products, ease of entry and exit, perfect information, and the inability of individual firms to influence the market price. In the short run, a firm in a perfect competition market can continue to operate even if it is experiencing losses due to certain characteristics of the market structure.
Therefore, even if ABC Co. is selling its products at a price lower than its average total cost (resulting in losses), it continues to produce and sell at the prevailing market price.