In a perfectly competitive market, which scenario best illustrates the process of long-run equilibrium adjustment after a period of economic losses for firms?

In a perfectly competitive market, when firms experience economic losses, some will eventually leave the market. This happens because the losses make it hard for them to cover their costs. As these firms exit, the overall supply in the market decreases, which can lead to higher prices for the remaining firms. For example, if a market for oranges sees some growers leaving due to losses, the reduced supply can push prices up, allowing the remaining growers to become profitable again. Over time, this adjustment leads to a new long-run equilibrium, where firms in the market are earning normal profits, covering their costs without making excessive gains or losses.