Perfect competition 
Individual firm and industry: Normal profits

Equilibrium occurs when the price determined in the market is just sufficient for the individual firm to earn a normal profit.  This occurs at a price of P2 where MR=MC and AR=AC.  The firm covers all its cost (including the opportunity cost of self-owned, self-employed resources).  The firm is doing just as well as it could if its resources were employed elsewhere.  Therefore there  is no incentive for existing firms to leave the industry or for new firms to enter the market.