Equilibrium

Explain clearly how a perfectly competitive firm moves from a short-run equilibrium, where it makes positive economic profits (i.e. P > ATC) or economic losses (i.e. P < ATC), to a long-run equilibrium where such profits or losses vanish (i.e. P = ATC). Be sure to discuss both situations. [To receive full mark, your explanation must reflect the class lecture and discussion held on this question.]