Question

In the long run, ____ firms will ____ the industry so that the market supply curve shifts to the _____, until prices ______ sufficiently so that all firms make a normal profit only.

•  A. new firms; enter; right; decrease.
•  B. new firms; enter; left; increase.
•  C. existing firms; exit; right; decrease.
•  D. existing firms; exit; left; increase.

Answer 1

In the long run, new/existing firms will enter/exit the industry so that the market supply curve shifts to the right/left, until prices decrease/increase sufficiently so that all firms make a normal profit only.

So, the correct answers are A and D.