Final answer:
The correct statement after the expiration of a patent in a perfectly competitive market is that the market price falls to P2, as increased competition pushes prices down to where firms earn zero economic profits in the long run.
Step-by-step explanation:
When a patent expires in a perfectly competitive market, other firms are free to enter the market and use the technology. This typically leads to increased competition and, as a result, the market price tends to fall. According to the principles of perfectly competitive markets, in the long run, no firm makes economic profits since the market price will eventually reach a point where it equals the minimum average total cost (ATC) of all firms. Therefore, in this scenario, the correct statement is likely "A. The market price falls to P2" because it would reflect the new long-run equilibrium where firms earn zero economic profits (P = MR = MC = ATC).
The statement "B. All firms’ average-total-cost curves decline to ATC2" might not be necessarily true, as it depends on whether the industry is a constant-cost, increasing-cost, or decreasing-cost industry. Entrance of new firms using the now non-patented technology could potentially lower costs through economies of scale, but it is not a guaranteed outcome for all firms. "D. All firms make positive profits" is not true in the long run due to the entry of new firms driving prices down to the zero-profit level.