If firms in a competitive price-searcher market are earning economic profits, which of the following scenarios would best describe the change existing firms would face as the market adjusts to long-run equilibrium?

Question

Quizplus · Accepted Answer

In a competitive price-searcher market, economic profits attract new firms, increasing market supply and leading to a decrease in demand for each existing firm, resulting in lower prices until profits are eliminated.

If Firms in a Competitive Price-Searcher Market Are Earning Economic