Answer: continue operating in the short run.
Step-by-step explanation:
In the short run, at least one of the input that is used in the production of a good or service is fixed while the other inputs are variable.
A firm will continue to operate in the short run in a situation whereby the price is more than the average variable cost.
Since we've been told that P=MC, abd that the perfectly competitive firm's MC = $100, AVC = $80 and AC = $110, the firm should continue operating in the short run because the price ($100) is more than the AVC($80).