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.

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

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.

answer; /// blank(1); increases; blank(2); decreases;

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.