What happens when new firms enter a perfectly competitive market?

One of the dominant features of a perfect competitive market structure is that firms enter and exit freely. Therefore, when new firms enter the market, the following happens:

1. Firms will take the price set by the forces of market demand and supply. These new firms are price takers. They are not likely to influence the overall market due to the sheer number of competitors. Consumers are reluctant to pay prices above market equilibrium, and new firms must be mindful of this.
2. The entrant will make normal profits. since firms are price takers, they can't make super-normal profits because they are unable to charge high prices.

This is a largely hypothetical market structure. Not many markets meet the criteria of being perfectly competitive. Even in markets that could be considered perfectly competitive, companies still set their prices based on production costs; they don't simply adopt existing prices.