In a perfectly competitive market, which of the following statements is true regarding economic profits in the long run?

In a perfectly competitive market, economic profits tend to disappear in the long run. This happens because, when firms are making profits, new businesses are attracted to the market. As these new firms enter, they increase the supply of goods, which usually leads to lower prices. Eventually, the price falls to a level where firms only earn normal profits, meaning they cover all their costs but do not make extra profit. For example, if a bakery is making a lot of money selling cookies, other bakers may open up nearby, causing cookie prices to drop until the original bakery only breaks even.