In a perfectly competitive market, if a firm is experiencing economic profits, which of the following is most likely to occur in the long run?

In a perfectly competitive market, if a firm is making economic profits, it means that the firm is earning more than what it costs to produce its goods. This attracts other firms to enter the market because they see an opportunity to make profits too. As new firms join, the overall supply of the product increases, which usually leads to a decrease in the price of the good. Eventually, the price will drop to the point where firms are only earning normal profits, meaning they cover their costs but do not earn extra profits. For example, if a bakery is making a lot of money selling cakes, other bakers will start opening shops to sell cakes as well, causing cake prices to fall until profits are normal again.