Question

​Suppose a perfectly competitive firm and industry is in long-run equilibrium and the firm earns an economic profit in the short run. Which of the following is likely to occur in the long run?

​The market supply curve will shift to the right, and the market price will decrease.​price exceeds average variable cost.​an economic loss.

Answer 1

The market supply curve will shift to the right, and the market price will decrease.​

Step-by-step explanation:

The economic profit attracts new firms in the market which increases the supply in the market so the price decreases and the quantity increases, the market firms will increases up to the economic profit equal to zero so in long run the firms earn zero economic profit.