Hi Mahee,
Preflop: looks fine
Postflop: MP looks like a recreational player (due to stack size) so I am not looking to bet fold there.
While he can sets and an occasional 2p like 78 (unlikely) he can also do this with 99, JJ possibly even QQ and of course T9 (if he has 78 he has T9) and flush draws.
So bet/call should be our play here.